The 2015 Global Startup Ecosystem Report

The Global
Startup Ecosystem
Ranking 2015
*
with
from
by
Foreword by Steve Blank
The Startup Ecosystem Report Series
Compass.co (formerly Startup Genome)
with the support of Crunchbase
*excluding China, South Korea and Japan
August 2015 Version 1.2

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Mene, mene,
tekel, upharsin The Writing is On
the Wall
50 years ago Alfred DuPont Chandler, a business historian at
Harvard, wrote Strategy and Structure: Chapters in the History
of the American Industrial Enterprise. The book chronicled the
transformation of four American companies, DuPont, Standard
Oil, General Motors, and Sears in the first decades of the 20th
century. It charted how they grappled with a series of strategic
changes; expanded markets, vast geographic distances, multiple
customer segments, diversified product lines, and so on. These
four companies were the first to realize that their existing
centralized functional organizations — organized into sales,
marketing, engineering and manufacturing departments — were
inadequate to deal with these strategic shifts.

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In response to the changing strategic needs, CEOs and their
boards began to experiment with new corporate organizational
structures. Eventually they shifted from functional organizations
into organizations comprising vertically integrated divisions. The
corporate central office provided planning and coordination,
while each division contained all the necessary resources and
functions and is individually responsible for profit and loss. Forty
years later, the multi-division firm was the standard form of
organization and management for complex industrial firms.
education, construction, transportation, retail
finance, and even governments themselves.
Companies in the 21st century are dealing with strategic
issues as large as those in the beginning of the 20th. The old
rules for corporate growth and profit no longer apply. We see
the symptoms of this everywhere, particularly in declining firm
performance and declining Return On Assets (ROA). In fact, the
average life of a company on the S&P 500 has declined to about
15 years from 65 since the 1920s.
Every existing company will have to deal with this common
economic problem: how do you build an effective organization
in a time of continuous disruption — one where the old rules
and structures no longer work. Companies will need to adapt
a new strategy that embraces disruption, sustaining innovation,
and execution. Crucially, they need to build new organizational
structures that embrace those changes.
The problems companies were trying to solve in the early 20th
century were how to manage an enterprise across vast geographic
distances, how to build and manage multiple customer segments,
and how to build brands to engage the newly emerging U.S.
middle class. In the 21st century the problems are now inverted.
The world is not only flat but it’s instantaneous. Consumers are
connected. Entrepreneurs are connected. The cost of entry for
most new ventures has plummeted. The speed to reach new
users is growing in record and accelerating time. Competition
comes not only from companies in local, regional or national
markets, innovation now comes from everywhere on earth. The
Internet accessible to a wired planet means most markets are
being re-imagined as part of a connected world. This relentless
wave of disruptive innovation is marching through not only
technology industries such as computers and communications,
but is destroying industries thought of as forever stable and
predictable: newspapers, entertainment, energy, healthcare,
commerce,
Most of the innovation and disruption are coming from new
entrants — young, fearless, and not afraid to take on the status
quo.
So now what? Existing corporate strategy and structures have
proven unequal to adapt to this changing economy.
Only then will we look back and realize
that we were just beginning the economic
revolution of the wired world
The democratization of entrepreneurship from Silicon Valley
and from startup ecosystems all over the world is creating new
strategies and structures for that disruption and innovation. It is
the strategy lessons from startups that will light the way for the
massive restructuring of all corporate structures by the middle
of this century. Only then will we look back and realize that we
were just beginning the economic revolution of the wired world.
Steve Blank

STARTUP
REVOLUTION
SERIES
Part 1
The Great Transition: Industrial to Information Revolution
Part 2
The Decline of the Blue Chip
Part 3
The Rise of the Startup
Part 4
The Critical Role of the Startup Ecosystem

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The Startup Revolution Series |1
The Great Transition:
Industrial to Information
Revolution
Have we reached a critical tipping point in the transition between
the Industrial Era and the Information Era? It is difficult to define
a precise moment when major economic epochs swap places of
relative dominance, but there is an increasing amount of evidence
that points to a significant decline in businesses founded in the
Industrial Era or which operate under Industrial Era principles. At
the same time, one can hardly fail to notice the explosive rise of
the Information Era.
If we look at the performance of the types of companies that have
been the lifeblood of the economy for several centuries, we see
worrisome trends. The Shift Index1, by the Deloitte Center for the
Edge, notes a 75% decline in Return on Asset (ROA) performance
for U.S. companies over the past 45 years, despite increasing
labor productivity over the same time frame. Meanwhile, the
success of market leaders appears to be increasingly short lived,
with the length of time a company remains on S&P 500 declining
by almost 80%.
Over the last 15 years, a significant portion of job and economic
growth in the U.S. has come from high-growth technology
companies such as Apple, Amazon, Google, Salesforce, VMware,
Facebook, Twitter, Groupon, and Zynga. And while Apple was
officially incorporated in 1977, it was only when Steve Jobs
returned to helm in 1997 that the company reinvented itself
using the process of what one might call disruptive technology
intrapreneurship, which later led to the development of the
iPhone, iPad, and their corresponding suite of app ecosystems.
These new product innovations transformed Apple from a
struggling organization to the company with the largest public
market cap on the planet—quadrupling its value in just the past
five years alone.
1 Hagel, J., Brown, J.S. & Davidson, L. (2009)
Consider this: The entire U.S. GDP is $15 trillion. Collectively,
these nine big-hitters of the tech world that barely existed a
decade and a half ago have created almost a trillion dollars in new
wealth. Will the trend of multi-billion dollar tech startups that have
a disproportionate effect on the needle of the global economy
continue? As we will discuss in the following set of essays, many
signs point to a definitive yes. The virtual explosion of startups
below the radar is so substantial, The Economist recently likened
it to the Cambrian moment of species evolution2.
Humanity doesn’t see transitions between major economic eras
very often, but when they come, every aspect of society gets
reinvented: government, business, finance, education, medicine,
energy, technology, art, and science all get upgraded. In fact,
most historians would argue there have only been three such
transitions before in human history: 1. Foraging to horticulture
2. Horticulture to agriculture 3. Agriculture to industrialization.
The Industrial Revolution was the last great full spectrum societal
transformation, and the Scientific Enlightenment that ensued
gave rise to modernity. With two billion broadband Internet
users and billions of smartphones now entering circulation,
the necessary tools and infrastructure are in place for the
Information Age to burst into full bloom, moving beyond the
confines of just the technology world to transform all aspects of
society. Therefore, the role of technology entrepreneurship in our
global economy is now more important than ever. Increasingly,
it is becoming clear that technology entrepreneurship will be
the primary growth engine of this new economic era.
Having gone through a fairly severe dot com boom and bust
cycle only fifteen years ago, it is understandable that many
people imagine a similar fate for the current tech boom. Yet
while it is human nature to expect the future to look like a
2 Siegele, L. (2014)

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linear progression of the past, that thinking does not produce
good predictions when the pace of change is accelerating, and
is especially inaccurate in the midst of epochal transitions. So
rather than seeing the recent boom as a sign of a coming bust,
we see it as a harbinger of long-term exponential wealth creation
over the comings decades.
Yet making the case that exponential wealth creation is on
the horizon should not produce unbridled optimism. The
development from one era to the next requires dangerous
periods of transition, where a society can either slide into turmoil
or rise to the occasion, using foresight to summon fortitude and
grace. We will have to be thoughtful but bold about how we shed
our industrial skin—and the institutions, business, jobs, culture,
and traditions that have come with it.
Undeniably, this kind of change is not an easy thing. Adaption
requires the release of much of what was previously familiar,
comfortable, and secure. But if we can adopt new skills, beliefs,
and values appropriate for the new Information Era, we can reap
the prosperous potential the Information Era would like to sow.
The Industrial Revolution brought wealth and prosperity unseen
before in the likes of human history. In 1750, the total wealth of the
world sat at an estimated $126 billion dollars. Today the world’s
wealth is calculated at over $70 trillion. But the hard truth is that
the Industrial Era strategies, mindsets, and behaviors that got us
here will no longer take us much further. To successfully make
the transition to the Information Era, much of the socioeconomic
fabric of society needs to be reinvented. If we do not adapt and
release much of our now expiring industrial era mindsets and
practices, then the dark days of the 2008 economic recession
may return. To avoid this fate, we must let go of the past and
engage with the future to ensure that the greatest era in human
history is closely in front of us.
This Startup Ecosystem Report will explore why we believe
technology startups are the primary growth engine of the
Information Era and how nurturing startup ecosystems can keep
the world on a path to greater prosperity.
Together we can lay the groundwork for a successful transition
into the new socioeconomic era of the Information Age.
Let’s dig in.

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The Startup Revolution Series |2
The Decline
of the Blue Chip
Humanity may be approaching—or have already passed—the
tipping point between the Industrial Era and the Information
Era. Now we will dive deeper into why much of the old business
and economic wisdom no longer seems to apply with blue chip
companies becoming far from the reliable investments they used
to be.
Not so fast.
Let’s start with the good news.
Better productivity, worse results. What is going on behind the
scenes to lead to such diverging indicators?
Since 1965, labor productivity has more than doubled. Economists
define the inputs to this calculation as number of hours worked
and the outputs as industry growth. In some industries, such
as technology and telecommunications, labor productivity has
grown by more than 800%. Productivity is usually considered a
key performance indicator for economic growth, so with all the
productivity gains companies should be growing faster than ever,
right?1
During the same time period, companies experienced a 75%
decline in Return on Assets (ROA) and a decline of almost 80% in
the length of time an S&P 500 company could expect to remain
on that list.
For answers, we turn to the monumental Shift Index, released in
2009, by John Hagel, John Seely Brown, and Lang Davidson of the
Deloitte Center for the Edge, which documents the long-term
decline of business profitability. While the report focused solely
on American companies due to the availability of data, it would
be a mistake to assume their conclusions are purely U.S.-based.
Rather, we believe their findings are generalizable to Industrial
Era industries all around the world.2
Exhibit: Labor Productivity (1965-2010)
Source: Compustat, Deloitte analysis
They found two clear trends that cannot be ignored: declining
company performance and an increasing topple rate from
positions of market dominance. First let’s look at “the what,” then
we’ll explore “the why”.
Declining company performance
While there are a number of ways to measure growth metrics
(such as return on invested capital), the Shift Index authors
focused on Return on Assets, or ROA, as it measures how much
a company is able to do with what is has—in other words, how
much profit it can make by turning its inputs into outputs.
1 Hagel, J., Brown, J.S. & Davidson, L. (2009)
2 Hagel, J., Brown, J.S. & Davidson, L. (2009)

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When they reviewed data for the past 45 years, the authors and
the community at large were equally surprised to find a drop of
75%. And while recessions in 2001 and 2008 clearly added to
poor performance, the graphed results show a long-term trend
that is as challenging to explain away as the result of anomalies.3
The authors surmised, “after questioning and re-questioning
our data and our assumptions, we came back to the same
conclusions. The downward trend in company performance is
accurate, the assumptions are reasonable, and further analysis
confirms these persistent trends.”
At the same time, anyone who has spent much time with statistics
knows that averages can provide useful high-level perspective,
but can also skew conclusions if a small number of data points
vary widely from the rest. So to gain a sharper perspective, the
authors separated the companies into performance quartiles. The
results from The Shift Index, showed that “the ROA Performance
Gap between winners and losers has increased over time, with
the winners barely maintaining previous performance levels,
and losers experiencing rapid deterioration in performance.”4 In
other words, not only were poor performers dropping rapidly,
even the best companies were only stagnating.
Increasing Topple Rate
In the following graph, topple rate is defined as the propensity of
market leaders on the S&P 500 list to “topple” from their leading
rank, and thus fall off the list. The authors describe the meaning
of this dynamic as such: “Back in the 1930’s, a company coming
on the S&P 500 list could expect to remain there for 65 years.
Exhibit: Economy-wide Asset Profitability (1965-2008)
Exhibit: Economy-wide Asset Profitability quartile (1965-2008)
Source: Compustat, Deloitte analysis
3 Hagel, J., Brown, J.S. & Davidson, L. (2009)
4 ibidem
In addition to the declining performance of the blue chip category,
it also appears the success of market leaders is increasingly
short-lived.
Source: Compustat, Deloitte analysis
In recent years, the average life-time of a company on the S&P
500 has declined to about 15 years, a decline of almost 80%.”5
So those at the top aren’t staying there long. What about those
at the bottom of the market?
“The churn for the lowest decile (0-10th percentile) has been
declining, implying that fewer firms are performing poorly enough
to sink to the bottom, but those that do are experiencing long,
drawn-out declines.”6 Another way of interpreting this information
might be that now that the ground Industrial Era economic
conditions have shifted, businesses that were adapted to those
conditions do not know how to adapt to the new conditions of
the Information Era, and thus await a languishing future to be
followed soon by death.
Exhibit: Economy-wide Firm Topple Rate (1965-2008)
Source: Thomas C.Powell and Reinhart, “Rank friction: an ordinal approach
to persistent profitability.“ Compustat, Deloitte analysis
5 ibidem
6 Hagel, J., Brown, J.S. & Davidson, L. (2009)

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Why Is Performance Declining?
Now that we understand more about the decline that is taking
place, the most important question to answer is why. It would
seem paradoxical—increasing productivity coinciding with
declining results, but there is an answer. In a word, it’s pressure.
During the Industrial Era, companies were somewhat insulated
by low levels of competition, information obscurity, and growing
consumption. But the Information Age has made those barriers
more obsolete than castle walls after the introduction of
gunpowder.
Let’s look at these three new competitive pressures they must
face in more detail.
Factor 1: Greater competition
Competitive intensity has more than doubled during the last 40
years—as measured by market concentration—due to falling
barriers to entry and economic liberalization.
Exhibit: Churn Rate in 90th-100th Decile (1967-2006)
Source: Compustat, Deloitte analysis
Falling barriers to entry: It used to be far more difficult to start
a company. Product production was very capital intensive
and slow, customers were hard to find and also expensive to
reach. Today’s technology means a business can be started
inexpensively and quickly with cloud-based services, freelance
talent, and plug and play technologies. This equates to more
entrants, and consequently, a dramatic increase in competitive
intensity.
Economic liberalization: We live in an increasingly globalized
world, where global communication and shipping is exponentially
easier than it at any other time in human history. In many
instances, once a business is up and running, global markets
can be reached overnight. Companies no longer compete solely
in their domestic geography, but against firms from all over the
world.
consumers. This same transparency applies to B2B offerings as
well, with price and quality comparison tools available for almost
every industry. If there is a niche left where transparency doesn’t
exist, you can be sure someone is working on a solution to fill the
gap.
Branding is far from useless today, but it is no longer the golden
goose it once was. The Shift Index found 47% of people strongly
agree there isn’t much cost associated with switching brands.
A simple way of summing up the effect of information transparency
might be, that in the Industrial Era, sales & marketing were arguably
the most important functions of a successful organization. Yet in
the Information Era, design & engineering reign supreme as the
superior product is now far more likely to win.
Factor 3: Declining consumption
Factor 2: Information transparency
The world has changed so completely it can be hard to recall
the “quaint” days when most of what we knew about a product
was from a TV commercial or what the local salesman had to
tell us. These were the glory days of branding, when a company
could define its own image, irrespective of critical review, and
then communicate that identity with clever marketing as long as
they had the money to spend on ads.
But this advantage of large companies has disappeared in the
wake of information transparency. Consumers can find the best
price for a flight on Kayak and the most inexpensive product on
Google. Increasingly, pricing information is available real-time
at the point of purchase, lowering prices and squeezing profit
margins. They can also find the highest rated service providers
on Yelp and best rated products on Amazon based on the
crowdsourced intelligence of hundreds or thousands of fellow
After a long period of post-war consumption increase, people are
buying fewer new goods than ever before. Not only did the 2008
economic downturn thin the pocketbooks of the middle class,
consumers are now more fully embracing engaging experiences
and lasting relationships as reliable sources of fulfillment,
decreasing the demand of shiny new goods that promised
happiness but consistently failed to deliver.
Consumers are also increasingly selling or renting their fixed
assets when they aren’t being used. Craigslist and eBay created
a thriving used-goods marketplace, ZipCar showed the world
that owning a car wasn’t always necessary, and AirBnB built an
entire industry out of previously unused guest bedrooms. These
trends are supported not just by frugality, but an increasingly
environmentally conscious population that wants to minimize
their impact by reusing what has already been produced.

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More dollars in the sharing or renting economy means fewer
dollars in the traditional producer-consumer marketplace, and
many of the companies thriving today are facilitators of existing
physical assets rather than producers of new ones.
What about the other lever of profitability, increased revenue?
The traditional Industrial Era approach is more and better
marketing. Focus on marketing can create a spike in revenue
if this area is unoptimized or when new Information Era tools
like segmentation and analytics suites are developed that allow
further optimization. Marketing is powerful, but it isn’t the silver
bullet either. Marketing approaches can quickly reach a point of
diminishing returns, just like the strategy of pursuing cost cutting
efficiencies.
If the traditional Industrial Era approach to decreasing costs and
the traditional approach to increasing revenue have both reached
a point of diminishing returns, what then is the solution? The
answer is disruptive innovation; achieved through the creation
of new Information Era products and services.
How can blue chips respond?
There are generally two main levers to increasing profitability—
either increase revenue or decrease costs. Many business
schools have trained executives in the science of cost cutting
efficiency. Think just-in-time manufacturing, workforce reduction,
and economies of scale. This worked very well as a profitability
lever for decades, until the point where efficiency reached a
critical point of diminishing returns, competition still continued to
increase. Essentially, you can’t cost-cut your way to profitability ad
infinitum, at some point your cost cutting efforts begin degrading
the essential qualities of the organization itself.
Yet, while this solution provides plenty of hope for the global
economy, it provides plenty of gloom for Blue Chip Industrial
Era incumbents. Information Era disruptive innovation requires
completely new ways of working, new culture, new tools, new
economics, new everything. Who is figuring out how to adapt
and succeed in this brave new world better than anyone else?
Technology startups.

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The Startup Revolution Series |3
The Rise of the Startup
This is the third essay in the “Startup Revolution Series.” In the
first part, we suggested humanity may be approaching—or
have already passed—the tipping point between the Industrial
and Information Eras. In the second, we provided data that
demonstrates fairly conclusively that over the last 50 years,
Industrial Era focused blue chip companies have lost significant
value and much of their potential for renewed growth.
So what is rising in their place? This post will focus on the
Information Era businesses that are best adapted to this new
Darwinian business environment: Startups.
The Startup Explosion
So many startups have burst on the global scene that The
Economist likened the entrepreneurial explosion to the Cambrian
Explosion in earth’s biological history. High-growth technology
companies have penetrated nearly every area of society, and
for every declining or transforming Industrial Era company, one
can usually find an emergent Information Era replacement—or a
suite of them. As Marc Andreessen famously put it: “Software is
eating the world.”1
The following is a list of some very successful Information Era
companies that have succeeded by upgrading Industrial Era
products and processes for the Information Era.
• Kodak  Instagram (Photography)
• Borders Books  Amazon (Books)
• Tower Records  Apple, Spotify (Music)
• Hotel Chains  Airbnb (Travel)
1 Andreessen, M. (2011)
• Taxis  Uber/Lyft (Transportation)
• Resumes & Recruiters LinkedIn (Human Resources)
• Newspapers  Social media (Information Consumption)
• Retail stores  eCommerce (Shopping)
How big is this trend? Quantifying change while it is occurring
can be a fool’s errand, but varied indicators suggest that a
hockey stick best describes startup category growth. The graph
below demonstrates the growth of Innovation Industries in
comparison to traditional industries in Silicon Valley.
Exhibit: Innovation Industries and Overall Economy Silicon
Valley (2003-2013)
Source: Moody’s Analytics
Analysis: Collaborative Economics

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Why startups are exploding
To what extent is talk of a revolution too much inflated hype?
Will this bubble burst like the last one? While no one can fully
predict the future, we can confidently echo The Economist in
saying that “Today’s entrepreneurial boom is based on more
solid foundations than the 1990s Internet bubble, which makes
it more likely to continue for the foreseeable future.”
What is happening behind the scenes to foster this kind of “sudden”
explosion? The answer is many factors have been building to this
moment for some time. Steve Blank, an entrepreneur, thought
leader, and faculty member at Stanford and Berkeley proposed
four key reasons for the startup explosion.
1. Startups can now be built for thousands, rather than
millions of dollars
The cost of product development has fallen by a factor of 10 over
the past decade. Code is available in free snippets, integrations
are easy thanks to application programming interfaces (APIs),
development comes cheap with temporary freelancers wielding
plug & play tools, and once costly servers have given way to payas-you-go services.
2. A higher resolution venture finance industry
When a VC is required to spend millions of dollars on an investment,
they must make a small number of big bets. But the decrease
in capital needed to start a software company has opened up
the VC space to new types of investors: angels, accelerators, and
micro-VCs. The checks they write are smaller, generally in the
$10,000 to $500,000 range, which means they can make a whole
lot of small bets and give birth to a larger number of startups.
Since many can be started on such a shoestring, they don’t even
look for outside funding until later stages of development—an
idea that was all but impossible a decade ago.
3. Entrepreneurship developing its own management
science
In 1602, the Dutch East India Trading company formed the
world’s first multinational corporation. Around three hundred
years later Frederick Taylor, Henry Ford, and Alfred Sloan
invented the foundations of modern Management Science and
disseminated this knowledge in Business schools and MBA
programs throughout the world. The first wave of Information
Era venture backed software companies began in the 1970’s. For
the first few decades many entrepreneurs and investors in the
startup community misapplied the formalized lessons they had
learned in business school to the startups they were running.
Exhibit: Progression of Early Stage Investment
Silicone Valley Based Startups - For companies that Lauched
2006, 2009 and 2012
Source: CB Insights
Analysis: Collaborative Economics
Over time, many entrepreneurs began to recognize they were
playing a different game where the old rules did not apply in
this new context. Forty years after the inception of the modern
startup era, Steve Blank with The Four Steps to the Epiphany and
Eric Ries The Lean Startup laid the foundation for a Management
Science for Entrepreneurship which has come to be known as
the Lean Startup Movement.
The Lean Startup philosophy formally recognized that startups
were not shrunken down versions of large corporations (what Eric
Ries’ has called the Startup Dollhouse fallacy), where Industrial Era
management fundamentals—from hierarchical organizational
structures to rigid long-range plans—simply did not work well
for the rapidly evolving and uncertain markets and landscapes of
the Information Era. As the practices and principles of the Lean
Startup have continued to evolve and spread into mainstream
consciousness entrepreneurs have become significantly better
at creating startups.
Entrepreneurs who have internalized the Lean Startup
understand that incorrect assumptions are no longer disasters,
they are opportunities to pivot. Unfinished products aren’t hidden
behind closed doors, they’re called public betas. Development
doesn’t proceed from a binder full of requirements, but from a
flexible list of incremental improvements that are re-prioritized
every two weeks based on customer feedback.
Compass has been laboring in this same vein, analyzing data to
help determine what structures, processes, and people are most
conducive to a startup’s success. The Startup Genome Report
provided the first hard data behind the factors that increased
the likelihood of startup success—from the critical role of
mentors to the make-up of a founding team. Why Startups Fail
and Premature Scaling looked at the other side, demonstrating
that attempts to scale a business before product/market fit is

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conclusively achieved is the strongest predictor of failure. And
the 2012 Startup Ecosystem Report was the world’s first map
of the global expansion of high-growth technology businesses,
viewed by an estimated 10 million people and referenced by the
Obama administration, Chancellor Merkel, and countless other
global leaders.
4. Speed of consumer adoption of new technology
As The Economist feature noted, “The Internet is now fast, universal,
and wireless.” Not unlike what Gutenberg’s printing press gave
nascent publishers, this technology provides a mechanism for
startups, to inexpensively distribute new products and services
around the world almost instantaneously. From day one, a startup
can now be what Steve Blank refers to as a “micro-multinational.”
Large companies used to adopt technology from startups very
slowly. The old business adage, “no one got fired for choosing
IBM or McKinsey” governed their decision making process. In
just the last 5-10 years and increasingly so with each passing
year, corporate decision makers are more willing than ever to try
out new cheaper, faster, more elegant solutions from emerging
startups.
The ease of global access to users and customers all around
world and the increasing speed of technological adoption by
consumers and businesses has enabled startups to grow at a
significantly faster rate.
What Startups Mean To Economic and Job
Growth
While the most successful tech startups in the last two decades
like Google, Facebook and Amazon now loom large in the global
economy, it is highly likely that the powerhouses that will drive
the global economy in 2025 are companies you’ve never heard
of today. Many don’t even exist yet. They will be launched from
Silicon Valley, certainly, but increasingly from unexpected places
like Bangalore, São Paulo, Singapore, and the many startup
ecosystems around the globe that are increasingly in frenzied
competition for the magic combination of investment dollars,
founders, talent, and culture that leads to a thriving startup
ecosystem. With trillions of dollars of GDP at stake, it’s no wonder
governments are paying rapt attention.
But beyond wealth, startups also bring jobs. Lots of jobs. In fact,
they’re the only ones who bring new net job growth. The highly
influential Kauffman study demonstrated that over the past 28
years, startups were responsible for all net new job creation in
the U.S. On average over that period, Industrial Era companies
shed more jobs than they created, while startups added to the
total. Moreover, this stunning finding held up even when looking
at individual years. In 21 out of 28 years (75%), startups were the
only net job creators.2
Together, these circumstances make for a very simple equation:
In the coming decades, the ecosystems with the most thriving
startups will enjoy the most thriving economies.
A recent Harvard Business Review article studied the cultural
shifts taking place in real-time. Where “old power” is held by a
few and jealously guarded, “new power” is participatory and held
by many.3 Increasingly, new power structures and values are
pressuring, replacing, or transforming older power structures
that were reliant merely on consumption.
New power structures cater to the new ideals of an Information
Era society: People expect to share, shape, fund, produce,
and co-own companies, products, ideas, governments, and
even art. They feel an inalienable right to participate and value
informal decision-making, collaboration, do-it-yourself ideals,
transparency, and informal affiliation over long-term allegiance.
While the authors of The Harvard Business Review article argue
that some old power structures are necessary for forward
momentum (as evidenced by the failure of both Occupy Wall
Street and the Tea Party to effect lasting change), there is little
doubt that the Information Era values are thoroughly transforming
Exhibit: The Participation Scale
Source: Jeremy Heimans and Henry Timms www.hbr.org
What Startups Mean To Power Structures
In the first post we mentioned that while humanity doesn’t see
transitions between eras very often, when they come, every
aspect of society gets reinvented: government, business, finance,
education, health, energy, technology, art, and science. As the
Information Era bursts into full bloom, we are seeing its dramatic
impact quite notably in new values related to politics and power.
2 Kane, T. (2010)
3 Heimans, J., & Timms, H. (2014)

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expectations of Industrial Era power structures. To be successful
moving forward, both structures must learn from each other.
What Startups Mean To Society
Innovation is never clean. It is never linear. Our way forward in
the Information Era will invariably have many fits and starts. It
will take false turns. We’re still waiting for the personal jet packs
promised by earlier visionaries. But nor can we hold back the
tides of change. We must reinvent ourselves with care but also
with courage.
We must objectively study the data, rationally evaluate its
implications and boldly incorporate its implicit recommendations
in order to ensure and maximize our society’s future prosperity.
We must be prepared to continuously evolve, to push through
boom and bust cycles with an eye towards the longer horizon
and understand that what drives growth today will be different
from what drives growth tomorrow. The innovation history of
Silicon Valley is a valuable model to consider.
Exhibit: Evolution of Silicon Valley
From the perspective of today, tomorrow may appear murky,
but there is one thing we can see with the clarity of a crystal
ball. Our future will be constructed from the building blocks of
the Information Era. As we speak, entrepreneurs are crafting our
path forward on laptops around the world.
Welcome to the rise of the startup.
Source: Employment Development Department, Labor Market Information Division
Analytics: Collaborative Economics
Exhibit: A World of Difference
Source: Jeremy Heimans and Henry Timms www.hbr.org

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The Startup Revolution|4
The Critical Role of the
Startup Ecosystem
So if our entire global economic future rests on our ability to
support the growth of startups, how do we help them thrive?
startups rarely succeed, but when they do, they can succeed
brilliantly.
By supporting the evolution and development of the ecosystems
in which they are born.
Different Financing Needs
Wait... what? Aren’t Internet businesses inherently global?
Haven’t tools like Skype and Slack made location meaningless?
If successful traditional businesses get started every day around
the world, why do startups need the special support of a local
ecosystem?
If you’re an experienced entrepreneur, the challenges described
below may seem all too familiar. For the rest of the world who
is still trying to understand the complex and unique drivers
that either support or suppress startup growth, we hope this
provides some additional perspective on the importance of
startup ecosystems.
The Difference Between Startups and Small
Businesses
High growth technology startups are very different from other
businesses. If you begin a traditional small business, your odds
of succeeding for the first two years are pretty good—around
75%. On the other hand, if you found a startup, even if your idea,
team, product, and plan are good enough to gain VC backing,
you have a 75% chance of failing.1
That said, you’ll never find a local auto-body shop that reaches a
Fortune 500 market cap or hires 10,000 employees, but there are
hundreds of startups quickly pushing into those upper echelons
of growth. This is such a critical point that it bears repeating—
1 Blank, S. (2013)
Banks make loans to traditional small businesses. If you want
to start a dry cleaners, you can make a good business case to a
bank for why their loan to you is a solid investment. The bank can
compare your projections to millions of other dry cleaners and
plug it all into the time-worn risk/reward ratio for making loans.
For a well-run bank, this is like being the house at a casino. You
may win some and you may lose some, but at the end of the day,
the odds are clear and in your favor, so you will win a lot more
than you lose.
Venture Capital firms invest in late-stage, proven startups. If your
startup has achieved profitability and can show a hockey-stick
growth chart, you’ll have to hire a team of bouncers to keep away
VC firms from all over the planet looking to fund the next stage
of growth in exchange for a piece of your company. VC firms are,
by and large, structured to make multi-million dollar investments
in a small number of late-stage startups that they can shepherd
from strong to stratospheric results.
If you want to start a startup company from ground zero, you
may fail before you can even agree on a catchy name. Plus, from
the point of view of any standard bank your business model is so
new there’s almost nothing to compare it to, which makes you a
completely unacceptable risk. From the perspective of a VC firm,
you’re also too new to be worth the time of day. So who fills the
gap for early-stage startups?

﻿ 17
The A team: Angels and Accelerators.
The angel investor spreads their investment over a large number
of early-stage startups and takes a larger percentage of equity
in return. The vast majority of their investments fail, just as one
might lose many hands of poker. But the hope is that eventually
that royal flush will come up and they’ll find themselves owning a
huge chunk of the next ZenDesk or Salesforce.
The business model of accelerator programs centers around
“hacking” the early stage funding environment by preparing
companies for their first investment, usually within three months
of the end of their program. They invest at market terms, provide
access to mentors and training on a broad set of startup-related
subjects. In exchange they take 5-10% equity in the company.
How do angels and accelerators decide how to invest their
resources when a startup entrepreneur has neither a traditional
business plan nor multiple years of strong start-up results to
show? Is it that killer idea that grabs their imagination?
The “great idea” is perhaps one of the most mythical and
misunderstood elements to the entire startup process. Ask
anyone in Silicon Valley these days and they will tell you there
are no more new ideas. The secretive culture of the late ‘90s that
operated on 10-page non-disclosure agreements and NSA-like
hierarchies of classified knowledge, has given way to a culture
that understands execution trumps ideas. Today, walk into any
coffee shop south of Market Street in San Francisco, you will hear
a dozen fully transparent pitches, challenges, value propositions,
target customers and funding needs. It’s not that ideas don’t
matter, it’s that Silicon Valley has learned that the hard work that
differentiates winners from losers comes not in dreaming things
up but in getting them done.
If the A Team doesn’t invest primarily in plans, results or ideas,
what does that leave for companies that don’t yet have traction?
People.
For all the modern tools the Information Era has produced, earlystage startup capital investment still relies on an old fashioned
network of trust. Video-conferencing may allow people to
communicate from afar, but the “growth hack” for building
human trust has still yet to be discovered. The vast majority of
early stage investment dollars are found through the networks
of trusted human relationships.
Where can founders and early-stage investors find each other?
In a thriving local startup ecosystem.
Different Talent Needs of Startups & Large
Corporations
Rare Personalities
Working for a large company requires having the appropriate
experience to match a job description. Day in and day out
there are written goals, established processes, and predictable
routines to help facilitate output. This type of work is analogous
to traveling in a first world country where the trains run on time
and the hotel can be booked in advance with your credit card.
Working for an early-stage startup requires figuring out what
your job should be every day, how to accomplish things that
have never been done before and when you should throw out
everything that’s already been done and start over. This type of
work is analogous to traveling in a third world country where the
ferry is suddenly delayed at least two weeks and you don’t even
know if the next town will have a hotel. Myers-Briggs typology?
Keirsey temperament sorter? Pick your personality classification
system and it will tell you that it is a rare sort of person indeed
who has just the right combination of vision and execution, risktaking profile, and fear of failure motivation, leadership qualities,
and listening skills to be successful on a small startup team.
Rare Talent
Many people can read, write, and solve math problems. Very
few people can design a user experience to make a completely
new process feel intuitive, or decide the right way to parse and
visualize data to generate useful insights, or write a string of C#
code that solves an unprecedented problem in a scalable way.
To gain a sense of just how rare some of these necessary talents
are, consider the Silicon Valley Competitiveness and Innovation
Project 2015 report that demonstrated a stunning 70% of Silicon
Valley software developers are foreign born. This finding is even
more astounding considering an immigration environment that
requires considerable work and investment by companies to get
and keep visas for non-U.S. employees.
Single Geography
In-person conversations lead to innovation, especially for earlystage startups where the strategy is likely to change three times
between 9am and 5pm, and the best work is often done by a
core team after midnight over late-night pizza delivery. Success
requires moving fast and pivoting even faster, in a race to find
product/market fit before the money runs out. Often there is
precious little time to send thoughtful updates to far-flung
employees or account for multiple time zones. Look at the office
layout of early-stage startups and often you won’t even find desks
separated. Instead, the whole team sits around one large table
so they can all hear every conversation and informally stay on
the same—fast moving—page.

﻿ 18
Where can an entrepreneur find the doubly rare combination of
personality and talent necessary to build a successful start-up
team? In a thriving local startup ecosystem.
Different Inputs
If you start a pool cleaning service, odds are you don’t need
several months worth of research to tell you what customers
need. But for startups, the strategy changes and pivots happen
when entrepreneurs get surprising feedback from customers
that invalidate some of their core assumptions. This means
founders need ready access to potential customers to shape
their product as much as they need access to the talent to build
it. They need to sit down with these customers, ask questions,
watch their processes, uncover their needs. They need structured
usability sessions as well as tons of informal conversations about
a particular space or pain point. Whether the target is a teenager
for a mobile game or a CFO for an ERP system, easy access to a
wide variety of potential customers is a requirement.
The same holds true for inputs from mentors. In a fast-paced
world, no small early-stage startup team can be expected to
know everything about growth strategies, financing, taxes, hiring
laws, new technologies, marketing, and how to set appropriate
expectations internally and externally. Enter the mentor to provide
crucial perspective, advice, context, contacts, and inspiration to
the founding team. This role is so critical, a Compass.co study, The
Startup Genome Report, found that entrepreneurs with mentors
had three and a half times more growth and raised seven times
more money than those without.
Again, for all the technology being glamorized behind startup
success, the truth is that human relationships are the lead actors
of this movie and new technology is merely playing a supporting
role.
Where can an entrepreneur find the right concentration of many
different types of customers and engaged mentors—where the
culture runs so deep that even the local gym offers free services
in exchange for equity in your startup? In a thriving local startup
ecosystem. (And yes, this is a Silicon Valley reality.)
Ecosystem Winners and Losers
All of these factors have led certain geographic locations to have
dramatically higher concentrations of startups for decades. While
it hasn’t yet been proven if a thriving ecosystem improves the
success rates of each startup individually, it does act as a giant
factory, producing massive numbers of startups by lubricating
every step of the process. After that, it’s a numbers game. You
produce enough startups and many of them are bound to be
successful. Several of them even wildly successful.
“If you look at a list of U.S. cities sorted by population, the number
of successful startups per capita varies by orders of magnitude.
Somehow it’s as if most places were sprayed with startupicide.
I wondered about this for years. I could see the average town
was like a roach motel for startup ambitions: smart, ambitious
people went in, but no startups came out. But I was never able to
figure out exactly what happened inside the motel—exactly what
was killing all the potential startups. A couple weeks ago I finally
figured it out. I was framing the question wrong. The problem
is not that most towns kill startups. It’s that death is the default
for startups, and most towns don’t save them.” — Paul Graham,
founder of the leading startup accelerator YCombinator
To extend Paul’s analogy, startups are like seeds sprinkled onto
the earth. Most will die. A few will cling to life. A few will take
root and thrive into huge fields that feed entire populations—
something needed by the entire world economy. So what is
fertilizer for startups?
Paris in the 20s was a hotspot for art. It wasn’t just the presence
of painters alone that created the environment, but their support
by a vast network of art dealers who could sell paintings and
wealthy people who could buy them, which in turn attracted
more painters, who saw what people were buying, who helped
inspire the existing painters, who created more interesting work
that better supported the art dealers, and so on.
So, too, is the word ecosystem applied to a successful startup
environment for a reason. There is no one item that makes an
ecosystem fail or thrive, but a combination of many contributing
factors. The Startup Ecosystem Report 2015 from Compass.co
and many global partners will delve deep into these factors and
provide answers, ecosystem by ecosystem, across the globe.
Let’s get to it.

﻿ 20
Introduction to the
Startup Ecosystem
Ranking 2015
Welcome to the Global Startup Ecosystem Ranking part of our
Startup Ecosystem Report Series. It has been almost three
years since the last Startup Ecosystem Report was released in
November 2012, and since then the startup sector has grown at
a booming pace.
The centerpiece of the 2015 Startup Ecosystem Ranking is our
updated and revamped Global Ecosystem Index, which ranks
the top 20 startup ecosystems around the world. The Index is
produced by ranking ecosystems along 5 major components:
Performance, Funding, Talent, Market Reach, and Startup
Experience.
The primary basis of each component:
• Performance on the funding and exit valuations of startups
headquartered in an ecosystem
• Funding on VC investment in the ecosystem and the time it
takes to raise capital
• Talent on the quality of technical talent, its availability and
cost
• Market reach on the size of the local ecosystem’s GDP and
the ease of reaching customers in international markets
• Startup Experience on first-party survey data that is linked to
success of startups, such as having veteran startup mentors
or founders with previous startup experience
The rest of the report includes detailed deep dives into the top
20 startup ecosystems.
The 2015 Startup Ecosystem Ranking is a collaborative
effort involving:
• Insights from over 200 interviews with entrepreneurs from
25 countries
• Insights from 11,000 startup surveys completed in the last 5
months
• Insights from data and content partners from 10 countries
including: Deloitte, CrunchBase, Global Entrepreneurship
Week, Orb Intelligence, Dealroom, and many other
incubators, accelerators, VCs, policy makers, and academics
• Support from Ron Berman at Wharton Business School,
Dr. Thomas Funke from the German Federal Ministry for
Economics and Steve Blank, who wrote the foreword for this
report

﻿ 21
The Increasing Socioeconomic Importance
of Startup Ecosystems
Twenty to thirty years ago, almost all tech startups were created
in startup ecosystems like Silicon Valley and Boston. Today,
technology entrepreneurship is a global phenomenon, with
startup ecosystems similar to Silicon Valley rapidly emerging all
around the world. An interconnected, global startup landscape
is taking shape and we’ve gathered the data and crunched the
numbers that nobody else has to help you understand how to
best navigate this brave new economic world.
In September 2011, we wrote a blog post about the coming
“Entrepreneurial Enlightenment” and the factors behind its
emergence. The era is in full bloom now and there has never
been a better time to be a tech entrepreneur, as entrepreneurs
are now blessed with the tools, resources, and market conditions
to scale a company to billion dollar “Unicorn” status faster than
ever before.
The rise of the startup ecosystems all around the world should
also be seen in the context of the larger socioeconomic structural
shift taking place. Information era businesses have become the
dominant source of economic growth, significantly automating
or altering much of the industrial and service businesses of the
previous economic era. Many others have described aspects
of this structural shift under different names, such as Marc
Andreessen’s widely circulated Wall Street Journal essay, “Why
Software is Eating the World”1, Deloitte Center for the Edge’s
semi- annual “Shift Index”2, or Richard Florida’s Creative Class
Group, which has published numerous books on the topic, such
as the “Rise of the Creative Class”3.
1 Andreessen, M. (2011)
2 Hagel, J., Brown, J.S. & Davidson, L. (2009)
3 Florida, R. (2002)
Given technology startups’ critical role in the information
economy, the importance of healthy startup ecosystems only
stands to increase in the future. With this report we want to
accelerate the development of startup ecosystems around
the world by answering critical questions for entrepreneurs,
investors, and policy makers that are difficult to answer without
the data we have gathered and analyzed in this report, as well
as to raise the general populace’s awareness of the increasing
socioeconomic importance of startup ecosystems.
One of our main goals with this report is to help various
stakeholders answer the following kinds of questions:
For Entrepreneurs:
“Where should I start my new company?”
“Is Silicon Valley the best place to start my company because it’s the
global mecca of startups?”
“Has the cost of living in New York and the lack of available tech
talent made it a sub-optimal founding location?”
“When I’m ready, where should I open up my startup’s second
office?”
For Investors:
“How can I find new startup investment opportunities around the
world?”
“Given the lack of information out there about emerging startup
ecosystems, how do I evaluate which ones I should focus on for
finding new opportunities?”
For Policy Makers:
“What initiatives should I prioritize in my startup ecosystem to
maximize growth?”
“How should I measure the progress of these initiatives?”
For All Stakeholders:
“What is the best way to strengthen the overall vibrancy and
entrepreneurial spirit my ecosystem?”

﻿ 25
Total Exit Volume 2013 & 2014 in USD
Silicon Valley
47.30%
London
10.20%
Los Angeles
6.60%
Tel Aviv
6.50%
Berlin
6.10%
Boston
5.70%
Chicago
4.50%
New York City
3.60%
Amsterdam
2.50%
Seattle
2.10%
Paris
1.20%
Austin
1.20%
Singapore
0.80%
Vancouver
0.50%
Montreal
0.30%
Sao Paulo
0.30%
Toronto
0.20%
Bangalore
0.20%
Moscow
0.10%
Sydney
0.10%
Startup ecosystems in Asia have grown significantly, highlighted
by Singapore moving from #17 to #10 and Bangalore from #19
to #15.
Sao Paulo is the only Latin American ecosystem in the top 20.
The city has an abundance of venture capital in its ecosystem
but very few exits, with this lack of liquidity events likely stifling
growth.
Growth in the top 20 Canadian ecosystems has slowed relative
to the rest of the world. While Startup Output grew, though at a
rate slightly below average, exit value has remained fairly stable2
and venture capital investments increased by only 5% compared
to a 98% growth in the other top 20 startup ecosystems (20132014).
Exit Growth Rates
at a 47%1 rate, whereas many other ecosystems further down
the index are growing at much faster pace. With the same
measure, London has quadrupled1 and Berlin has grown by a
factor of 201 (due primarily to the two big IPOs of Rocket Internet
and Zalando). Over the coming years we expect Silicon Valley to
stay in the lead, even while other ecosystems temporarily grow
at a faster pace, with the expectation of ultimate convergence
towards an equilibrium that looks a fairly conventional 80/20
power law; i.e. Silicon Valley capturing 30-50% of the total exit pie,
the next 3 startup ecosystems capturing an additional 30-50% of
the pie and the following top 16 startup ecosystems capturing
the remaining 20% of the total exit pie.
Exit value grew much faster in the top European ecosystems
than in the top U.S. ecosystems: 4.1x in Europe versus 1.5x in
the U.S. (2013-2014), yet in 2014 the exit values were still on
average 82% higher in U.S. ecosystems than in European ones.
The Silicon Valley ecosystem has captured an astounding 47% of
the value of all startup exits within the top 20 startup ecosystems
over the past two years, as much as every other ecosystem
combined.
Capital Growth Rates
However, the global ecosystem landscape is maturing rapidly.
Over the past three years, non-Silicon Valley ecosystems of the
top 20 captured 14% more of the exit value pie (Silicon Valley
captured 55% in 2012 and 41% in 2014), an especially telling
statistic as the pie itself is growing exponentially.
The ecosystems with the most growth in VC were Bangalore (4x),
Boston (3.7x), Amsterdam (2x) and Seattle (2x). Meanwhile, Silicon
Valley almost doubled up with 93% growth from 2013 to 2014,
with indications from Crunchbase that almost all of the increase
in Silicon Valley funding was in late stage Series B and Series
C+ capital rather than early stage capital, which was relatively
stagnant. The increase in late stage capital is aligned with the
Looking at the relative growth rates of exit value based on a
2013-2014 2-year moving average, we see Silicon Valley growing
Total venture capital investment across the top 20 ecosystems
rose 95% from 2013-2014.
1 See IV Methodology; 7. Growth Index

﻿ 26
trend of hypergrowth startups delaying going public much
longer in favor of continuing to rely on private capital, which is
far simpler from a legal and regulatory perspective.
The startup ecosystems with the most growth in seed rounds
over the last 3 years were Bangalore by 53%, Sydney by 33%, and
Austin by 30%, (all expressed as a 2012-2014 yearly average).
Only one startup ecosystem’s growth slowed: Moscow. Its average
number of seed rounds decreased by 32% over the last year.
Most Significant Changes In Ecosystem
Ranking since 2012
The startup ecosystems which made the biggest leaps are New
York, Austin, Bangalore, Singapore, Berlin and Chicago. New
York City made a significant leap among the established players,
moving from position #5 to #2 to take the silver medal. Austin,
Texas, meanwhile leapt all the way into #14th place, whereas
three years ago they didn’t even crack the top 20. Bangalore
moved from #19 to #15, Singapore from #17 to #10, Berlin from
#15 to #9, and Chicago from #10 to #7.
The startup ecosystems which made the biggest falls are
Vancouver, Toronto, Sydney, and Seattle. Vancouver slipped
out of the top 10 from position #9 to #18, Toronto slid from #8
down to #17, Sydney dropped from #12 to #16, and Seattle fell
from #4 to #8. Again, all of these ecosystems did grow in the
past three years, but not as fast as other ecosystems, which puts
them at risk of eventually being left behind.
Three ecosystems fell out of the top 20 completely since 2012:
Santiago, Melbourne, and Waterloo. Santiago experienced fast
“catch up” growth for several years but is now just a bit above
average with a growth index of 2.6 (average = 2.4). The growth
of Melbourne likely took a hit due to its close proximity to the
larger startup ecosystem of Sydney. Smaller ecosystems with
close proximity to larger ecosystems often have a hard time
continuing to grow due to new and existing talent and capital
migrating to the larger nearby ecosystem. Regarding Waterloo,
our methodological change of removing Startup Output per
capita as a performance metric is the main reason for its lower
ranking. It has a Growth index of 2.45, which, while only slightly
above average, is significantly higher than most of the lower
ranked ecosystems in the top 20.
Individual Startup Ecosystem Highlights
The New York City startup ecosystem moved from #5 in 2012 to
#2 in the world, solidifying its position as the dominant ecosystem
on the East Coast of the U.S., with Boston coming up from #6 to
#4.
One of the major reasons for NYC’s growth is that it is the most
popular location for startups foreign to the U.S. to open a second
office or move their headquarters. We noticed that once many
startups around the world have a functional, saleable product
in their home ecosystem, they look to set up a sales office in
NYC rather than Silicon Valley in order to gain access to the US
Market. However, a significant drawback to the NYC ecosystem is
a scarcity of well-priced technical talent due to competition from
other local sectors , such as Finance, Media, and Health Care.
Austin, Texas, made a big leap in the 2015 ranking, emerging from
the unranked to slotting in at #14. Austin’s strengths include its
high talent quality (ranked #5), its very entrepreneurial culture
(ranked #2 in Startup Experience), and its popularity as a second
office location for Silicon Valley startups due to its lower cost of
acquiring technical talent.
Berlin moved into the #9 position on the ecosystem index,
jumping up from #15 in 2012. This is an impressive jump and
means Berlin has gone from being a local powerhouse to being
a major global player. In our 2012 ecosystem report many
stakeholders involved in the Berlin ecosystem felt they were
under-ranked given the local energy and enthusiasm. In this
case, their provincial conviction turned out to be a harbinger for
future progress.
Boston is ranked #4 in 2015, two places higher than in 2012.
Boston has exceptionally strong late-stage performance metrics
highlighted by the fact that its exit value grew 52% faster than
the global average over the last two years1.
The Indian hub of Bangalore has had explosive growth in the
last few years. To many eyes, this rise is unexpected. For the last
couple of decades, Bangalore has been mostly an outsourcing
center, hardly characterized for the innovative culture required
for creating new technology startups. $2.256 billion of venture
capital was deployed in Bangalore in 2014, #7 among all startup
ecosystems. Bangalore also boasts an incredibly youthful startup
ecosystem, with the youngest average founders’ age of all the
top 20 ecosystems.

﻿ 27
The lack of gender equality is common across all startup
ecosystems. No ecosystem comes close to an equal share of male
and female founders, although psychologists and sociologists
continue to debate whether 50/50 is the target to strive [see
this article on gender differences by Florida State Psychology
professor Roy Baumeister]2 forhat’s the target to strive for
is debatable. Overall, the trend for female entrepreneurs is
significantly up—the number of female founders in the global
startup ecosystem has grown by 80% over the last three years.
In 2012, 10% of startups had a female founder, as compared to
the 18% global average among the top 20 in 2015. Chicago, with
30% female founders, has the greatest percentage of women
entrepreneurs out of the top 20 startups ecosystems.
US startup ecosystems (and to a lesser degree Canada) are the
only places in the world where a software engineer gets paid
a higher salary for working at a startup than at a comparable
position at a larger, more established corporate firm. Whereas,
in almost all other startup ecosystems worldwide, the salary for
working at a startup versus a large corporation is about the same
[1]. However, even this is surprising. Proper supply and demand
equilibrium would have startup employees earning a much
smaller salary than if they worked in a traditional corporation, but
with the upside of having various and generous forms of stockbased compensation. This dynamic speaks to the hot war for
talent in the top startup ecosystems, but also highlights the huge
imbalance in supply and demand for technical startup talent as
a pervasive global issue.
2 Baumeister, R. (2007)
Top Recommendations for Each Set
of Stakeholders
have reached financial equilibrium and are likely to have fewer
underpriced, under-discovered gems of companies.
For Entrepreneurs:
For Policy Makers:
Use the global startup ecosystem to distribute your organization,
aligning with the strengths of each ecosystem. For example, that
would translate to recommendations such as:
We see four areas where improved policy can impact the
success of an ecosystem:
• Have your executive team headquartered (or at least spend a
lot of time) in a well-capitalized ecosystem like Silicon Valley.
• Work in a smaller, and cheaper startup ecosystem when
your startup is pre-product market fit. Then move your
headquarters to a larger startup ecosystem after product
market fit is reached and you’re ready to raise a big financing
round.
1. The first is to find ways to stimulate the financial foundation
of your ecosystem by offering matching grants to VC funds
and direct grants to startups. Many ecosystems like Tel
Aviv, Singapore and Santiago have found these policies to
be very successful, especially in the beginning stages of an
ecosystem’s formation.
1. Create policy that minimizes the friction of incoming flow of
foreign capital and foreign talent.
• Set up a second office focused on engineering in an
ecosystem with a lot of inexpensive and plentiful tech talent,
such as Austin, Tel Aviv, or Sydney.
2. Next, simplify regulations for startups, allowing for low legal
cost of startup formation, startup bankruptcy, and liquidation
on startup exit.
• Set up a second sales office in NYC to get access to the U.S.
market and many big potential customers.
3. Lastly, differentiate your startup ecosystem and accentuate
its strengths. Startup ecosystems can differentiate by
focusing on a stage of the startup lifecycle such as how the
Start-Up Chile Grant Program has done for very early stage
startups. Or, focus on particular markets or product types,
such as media in Los Angeles or hard science in Boston.
For Investors:
We analyzed which ecosystems might be undervalued by
investors and have strong investment opportunities. We also
compared valuations at each funding round to the baseline
of Silicon Valley, and looked at the averaged investment per
company in an ecosystem, and measured the total investment
value to exit value ratio.
Based on this analysis we’d recommend investors spend more
time looking for opportunities in the undervalued ecosystems of
Amsterdam, Paris, Chicago, and Berlin. Spend less time looking
for opportunities in NYC, Toronto, Seattle, and Boston, which

﻿ 29
Deep Dives into
Top 20 Global Startup
Ecosystems
The essays at the beginning of this report discussed the broader
idea of a startup revolution in the midst of the transition from
the Industrial Era to the Information Era. Now it is time to take
an indepth look at the ecosystems where startups are born.
The following section assesses and compares the world’s
top 20 startup ecosystems based on Performance, Funding,
Market Reach, Talent, and Startup Experience. As established
in the methodology section, each of these five components are
comprised of selected quantitative and qualitative variables.
Underlying data has been sourced from this year’s survey
(with data gathered from approximately 11,000 participants),
more than 200 expert interviews, and a wide range of trusted
secondary sources such as CrunchBase—the world’s largest
startup dataset which rich data on variables such as funding,
office locations, and exits.
Here’s what we found:
Our overarching goal with the deep dives is to provide
actionable insights for entrepreneurs, investors, and policy
makers on the ground so they can better understand the
ranking and take beneficial actions.
• More in-depth information per ecosystem
The deep dives aim to give insightful answers to questions
such as:
• How many days does it take for startups in Bangalore to hire
talented software engineers?
• What is the average amount of money invested in a Series A
in Boston?
• How many jobs have been created by startups that are
located in Berlin?
To better understand our main audience and their
expectations, we collected feedback from roughly 500 people
about the 2012 Startup Ecosystem Report (SER).
• Entrepreneurs are the main audience, representing 53%
downloads of the Startup Ecosystem Report (SER) 2012
• 87% of the roughy 500 survey respondents recommended
the SER 2012 to someone else and 99% would like to read
the SER 2015!
• 82% considered the ranking to be the most valuable part of
the SER 2012
The most frequent feedback on our 2012 report was:
• More information about funding in a startup ecosystem
• More information about methodology and general
framework
• Coverage of more ecosystems
Although we were able to analyze over 40 startup hubs
across the globe, the first version of this year’s report focuses
exclusively on the global top 20. We may analyze additional
cities, and release additional deep dives for the remaining
ecosystems of our top 40 ranking in the coming months. Email
us if you have any questions at feedback@compass.co.
To allow for better benchmarking, we did not only compare
each ecosystem with Silicon Valley, but also with regional peer
groups. Having defined the global top 20, average values have
been produced based on the following groupings:

﻿ 32
Intro
Silicon Valley has earned its reputation as the global tech mecca
with 14,000 to 19,000 startups and 1.7 to 2.2 million high-tech
workers. It is the home to success stories such as Apple, Google,
Facebook, and countless others. Just these three companies
combined have a market cap of $1.5 trillion and employ more
than 165,000 people worldwide. Silicon Valley’s local and global
impact is undeniable.
The Silicon Valley Competitiveness and Innovation Project’s
report on Silicon Valley shows that each high-tech worker in its
ecosystem helped to generate roughly five jobs in the service
sector, ranging from physicians and teachers to restaurant
workers and landscapers.1 In its impact study, Facebook itself
claims to have created 4 million jobs globally, including app
developers and Facebook marketers.
Performance
1
Funding
1
Market Reach
4
Talent
1
Startup Experience
1
Growth Index
2.1
Silicon Valley
& Bay Area 1
USA
Even though startup ecosystems have exploded globally,
Silicon Valley still has about as much capital and exit volume
as the rest of the top 20 ecosystems combined. Decades of
lessons learned in high tech entrepreneurship in Silicon Valley
have been synthesized into a new management science for
entrepreneurship. This is highlighted by the foundational work
of Steve Blank and Eric Ries, which gave rise to the Lean Startup
movement, and whose principles and frameworks now guide
entrepreneurs all around the world.
As the poster child for the global startup ecosystem, Silicon Valley
continues to be an inspiration to other startup communities and
a gravitation center for founders and high tech talent. More than
50% of startups are founded by immigrants and more than 70%
of engineers are immigrants.2
1 Henton, D., Kaiser, J., & Held, K. (2015)
2 Deloitte LLT. (2015)

Silicon Valley 33
﻿
Selected Findings
Silicon Valley captures about 45% of the top 20’s
VC investments and exit value, almost 5x its closest
competitors New York and London.
Silicon Valley has the highest absolute growth in
VC investments and exit value. It captures 43%
and 30% of the top 20’s absolute total growth,
respectively.
Silicon Valley has a highly dynamic labour market.
At a 40 day average SV has the shortest time to
hire an engineer in the U.S.
Silicon Valley startups offer their products in 16%
more languages than the North American average.
Silicon Valley has the most Startup Experience:
48% of all startup employees have previously
worked in another startup.
Silicon Valley is the ecosystem with the highest
Startup Density in the top 20. Silicon Valley has
3x more startups per capita than Seattle or
Bangalore.
Silicon Valley’s main challenges are access to talent, affordable
housing, and adequate public transportation. This year’s U.S.
work visa cap of 85,000 was reached within the first week. 233,000
application were filed, the majority of which were for the tech
industry. Due to the lack of work visas it has become common
practice among Silicon Valley companies to build out remote
teams or to open second offices in other startup ecosystems
inside and outside the U.S. such as Austin, Seattle, Sao Paulo,
and Moscow.3 Leading Silicon Valley figures such as Paul Graham
and Mark Zuckerberg or organizations such as FWD.us and the
Silicon Valley Leadership Group advocate for immigration reform
to allow more international talent into the U.S. This would further
boost the growth of the high tech industry in Silicon Valley and
benefit the overall economic prosperity of its surrounding areas.
In addition to the stifling effect of the U.S. immigration policy,
in the last six years prices for 1 and 2 bedroom apartments in
the most popular neighborhoods in the Bay Area have almost
tripled—making it the most expensive place to live in the United
States. On top of significant financial barriers to housing, housing
is limited due to insufficient transportation, slow permits for new
buildings, and rigid zoning rules.4
Ecosystem Partners: StartupGrind, Computer History Museum,
GSV Labs
“I have been living in San Francisco for almost three
years now and if there’s something you can feel
in the air here: it is speed. I’ve never felt this in any
other place. The pace at which companies move
around here is just insane.”
––Stefano Bernardi, Co-Founder at Kickpay
3 H-1B Fiscal Year (FY) 2016 Cap Season. (2015)
4 SVCIP Report. (2015)
“If you’ve ever struck a golf ball so perfectly that
you don’t even feel the club making contact and
the ball just jumps – that’s means you hit the sweet
spot and similarly, Silicon Valley is the Earth’s
startup sweet spot. I’m a card carrying member
of the Silicon Valley rollercoaster, being on the
receiving end of much success and much failure.
There’s just no other place on the planet where
you can graduate with a class of Y Combinators,
snag funding and starting growing a business, fail,
pick up the pieces and be a success all in under
5 years! I’ve had so many great friends, advisors
and investors, all of whom you’d never find in one
tiny pinpoint location vying for the same prize
of building a startup dream into a burgeoning
business.”
––Jessica Mah, Founder and CEO at Indinero

Silicon Valley 36
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
23%
North America Avg
28%
22%
National government rated positive
11%
North America Avg
25% 134%
Immigration time
––Xavier Damman, Co-Founder and CEO at Storify
21
North America Avg
“Our parents used to go to the capital to have a career. Today is no
different. The world has just become a village and capitals are not defined
by countries anymore but by industries. For technology, Silicon Valley is
the capital. I moved from Belgium six years to create a startup in SF. What
makes SV unique is that people never push back on an idea. That gives
entrepreneurs the freedom they need to prove the world that their ideas are
worth something.”
23 10%
Top Policy Issues
Cost of living
Cost & availability of workspace
Immigration
“There are magical places and times where things HAPPEN - Athens in the
Classical period, Florence in the late 15th century - these place/times reach
a critical mass and produce inventions and ideas that become a part of our
collective human experience from that point on. When you are in a place like
that, the feeling is totally unmistakable and impossible to describe to someone
who hasn’t felt it. Different people react differently - some give each other high
fives and chase money and power, others surf the bleeding edge of discovery
and get their kicks from peering over the abyss, some sell shovels to the gold
miners - but fail or succeed, you are part of something big, magical, and
irresistibly important.”
––Ilya Druzhnikov, Serial Entrepreneur
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

﻿ 37
Intro
New York has evolved into the second strongest startup
ecosystem in the world over the past three years, with
approximately 7,100 to 9,600 active tech startups and the second
highest amount of VC investments.
According to Jones Lang LaSalle, local tech employment has
grown by as much as 40% since 2008—a slightly higher rate than
in Silicon Valley. In total, New York has created approximately
90,000 tech jobs. The city has recognized that supporting
startups is an opportunity for the city to upgrade itself and fully
adapt to the Information Era. In this spirit, NYC Mayor Bill de
Blasio continues to build on former mayor Michael Bloomberg’s
tech-focused agenda.1
Performance
3
Funding
2
Market Reach
1
Talent
9
Startup Experience
4
Growth Index
1.8
New York 2
USA
With a local GDP of approximately $1.5 trillion, the New York
ecosystem is a large playground to test and market all kinds of
products. This is a key reason why the city has become the most
popular ecosystem for startups to build out a second office for
sales and marketing.
According to recent statistics, the city is home to only 500,000
high-tech workers, which is 50% less than estimations for smaller
cities such as Austin, Seattle, or Boston. This is due to its relatively
recent rise, and therefore, lower number of late-stage startups
and mature tech companies.2 Big success stories like Etsy or
Shutterstock, both with a market cap just below $2 billion, are
lagging behind the success stories of Boston, Chicago, Seattle,
and L.A. However, rising stars such as WeWork, recently valued
at $10 billion3, illustrate New York’s growth potential.
The biggest challenge to remain at #2 overall is the cost and
availability of engineering talent. Startups in NYC compete with
1 Perry, T. (2015)
2 Henton, D., Kaiser, J., & Held, K. (2015)
3 Austin, S. (2015)

New York 38
﻿
Selected Findings
New York ranks second in Ecosystem Performance.
It is #2 in both Startup Output (number of
startups) and its Ecosystem Value of $47 billion
(estimated value of all startups at or prior to exit).
Though as a relatively younger ecosystem, its exit
value is lagging behind at #8.
New York is #2 in Funding with 20% more VC
investments and a 17% shorter time to raise than
Boston.
New York is the global distribution powerhouse
ranked #1 in Market Reach.
The cost of capital in New York City is lower than
in Silicon Valley with an average dilution of 16%
versus 19% in Silicon Valley.
New York startups employ one-fourth less foreign
team members than Silicon Valley startups.
New York-based startups employ 6% more females
than the North American average.
35% of the customers of New York startups are
located abroad.
53% of all startup employees previously worked in
another startup. This is the highest value in North
America.
numerous Fortune 500 companies, and as a result it takes 40%
longer to hire a software engineer than in SIlicon Valley.
Ecosystem Partners: Rubicon VC and DreamIt Ventures
“Business, entrepreneurship, and innovation come
naturally to NYC. It’s a city that built its foundations
on challenging the status quo. As such, New York is
home to all sorts of businesses including a healthy
startup scene. The well-rounded nature of the city
makes it much more difficult for the ‘cult of tech’
to take root. There is no room for techno-elitism
here, because the city is more diverse than just
tech startups. The community is more tolerant of
outsiders, not elitist, and lacks the self-aggrandizing
hyperbole of other communities. Few are running
around yelling about how they are ‘changing the
world’; instead founders talk about how they plan to
turn a profit.”
––Kosta Grammatis, CEO at Oluvus
“New York City is now the second biggest city in
the world for venture capital. And there’s a good
reason for this – it’s the melting pot of the world.
Millions of people come from all over to try their
hands at success, whether it’s in fashion, finance,
food, entertainment, advertising, or more and more
often, entrepreneurship and startups. And yet, New
York City’s startup scene has a very different vibe
from that of Silicon Valley. It’s a much smaller and
more tightly knit community. You have direct access
to many more traditional companies and industries.
And most importantly, there’s the excitement of living
in one of the most fast-paced and energetic cities in
the world.”
––Mattan Griffel, Co-Founder and CEO at One Month
“What I love about the NYC startup ecosystem
is that, it’s so diverse. Because NYC is the #1 city
within industries such as finance, real estate,
advertising, fashion and media there are a lot of
smart people entering the startup community from
these industries - especially since the financial crisis.
Now tech is trendy and banking is out. That mixed
with the general diversity in NYC gives an interesting
blend to the startup community which is much
different from the Valley. It is certainly more driven
by business, cash flow and tangible value. If your
business is tied to any of the major NYC industries I
think there is no better place to be.“
––Oscar Jung, Founder at BookBuses

New York 41
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
40%
Silicon Valley
23%
North America Avg
-42%
28% -29%
National government rated positive
53%
Silicon V
11% -80%
25% -53%
North America Avg
Immigration time
21
Silicon Valley
21 0%
23 10%
North America Avg
Top Policy Issues
Cost & availability of workspace
“If you are building a traditional technology startup, go to Silicon Valley.
If you are building any other organization, go to NYC. While 99% of my
conversations in San Francisco are about tech startups and I appreciate its
one singular focus, in NYC you are exposed to the best of class talent from
media, art, advertising, finance, large corporations, fashion and much more.
If you are building an organization that interacts with other industries on a
global scale, there is no better place than New York.”
––Fabian Pfortmueller, Co-Founder at Holstee
Cost of living
Taxes
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
As in 2012, Los Angeles is ranked the third-strongest ecosystem
in the world. At $34 billion, it ranks #5 in Ecosystem Value
(estimated value of all startups at or prior to exit). There are
between 5,500 to 8,300 active tech startups, the highest Startup
Output after Silicon Valley and New York.
Los Angeles boasts success stories such as Snapchat, SpaceX,
Whisper, and Tinder - just a few reasons why stakeholders
around the world pay close attention to L.A.-based tech startups
these days.
The city is estimated to have around 200,000 engineers hailing
from a variety of talent pools such as the renowned California
Institute of Technology.
Performance
5
Funding
4
Market Reach
2
Talent
Startup Experience
Growth Index
10
5
1.8
Los Angeles
Orange County 3
USA
Yet, L.A.’s key challenge is the same as Silicon Valley’s—cost
and availability of technical talent. This led to its ranking of only
#10 in Talent overall. In L.A., startups have to cope with annual
engineering salaries of $108,000, which is 16% higher than the
regional average of U.S. and Canadian ecosystems. This may
explain why, at 32%, L.A.-based startups have one of the highest
shares of remote employees (18% above the North American
average).
Aside from this drawback, the Los Angeles ecosystem is strong
in all other critical areas. For instance, the local market in L.A. is
61% bigger than in Silicon Valley. Los Angeles also ranks #5 in
Startup Experience, which enables its entrepreneurs to draw on
significant past startup experience and access to a deep pool of
seasoned employees and mentors.
Ecosystem Partners: Mucker Capital, Cross Campus and Techstars

Los Angeles & Orange County 43
﻿
Selected Findings
Los Angeles ranks #4 behind Boston in both
Performance and VC investments, yet it is #3 in
Startup Output and ties Tel Aviv in #3 for exit
value.
It has the second largest local market for startups
in the world right after NYC.
L.A.’s Growth Index is the lowest among top 10
ecosystems, just behind NYC and Singapore.
The average seed round in Los Angeles is 18%
lower than in Silicon Valley, though Series A rounds
are about the same size.
L.A. startups have teams that are 28% female 6% above the North American average.
L.A. startups have 40% fewer foreign customers
than the average startup in North America.
Almost 50% of startup employees in L.A. have
previous startup experience, and 18% of all
founders previously worked at hypergrowth
startups.
“Perhaps the most exciting thing about L.A.’s
startup ecosystem is that the founders have such
diverse backgrounds, many of them creative. In L.A.,
it’s not just about what you can do with tech, but
possibly even more about how technology shapes
today’s culture. It’s no surprise that companies like
SnapChat and Tinder are based in L.A.”
––Yohei Nakajima, Program Manager at Techstars LA
“With an annual output of around 3,000
graduates, Southern California produces more
software engineers than any other major U.S. hub
—including Silicon Valley. Ten years ago, the best
engineers typically had to move up to the Bay Area
to work for big tech companies such as Google and
Yahoo. Today, we have all these companies down
here, enabling our talents to stay with many of
them, ultimately creating their own startups. Braindrain is no longer the case.“
––William Hsu, Co-Founder and Managing Partner at Mucker
Capital
“Although the awareness of L.A.’s startup
community is a relatively new thing, it’s been clicking
for decades. As a result, the L.A. startup team is
more experienced than one might expect.”
––Dan Dato, Co-Founder at Cross Campus

Los Angeles & Orange County 46
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
23%
23% 1%
Silicon Valley
North America Avg
28% 23%
National government rated positive
21%
Silicon V
11% -49%
North America Avg
25% 21%
Immigration time
21
Silicon Valley
21 0%
Europe Avg.
North America Avg
22.8 10%
Top Policy Issues
Cost of living
Cost & availability of workspace
Taxes
“There is something magical happening in Southern California. Local
investors are increasingly adopting a pay-it-forward attitude and accepting
being “long” on their investment with startups. More exits bring entrepreneurinvestors to the funding pool and helping with hands-on coaching and
mentorship. Entrepreneurs are now staying home and do not need to travel to
the Bay Area to make it. The region is extremely entrepreneurial, and the tech
talent pool is now considering startups as an alternative in a career plan.
The wealth of industries, abundant creativity, and lifestyle oriented
environment is creating interesting approaches to innovation and the SoCal
region is defining its identity that is somehow different from Silicon Valley.
Virtual Reality for example is now anchored in Orange County and also LA
and is going to be one of the largest markets globally and Silicon Valley
investors have recognized it.
The Southern California ecosystem has bred innovations in entertainment,
technologies, and design, but to date hasn’t reached the level of recognition
Silicon Valley is enjoying. However, as TED talks are conveying ideas worth
sharing, Socal ventures are telling stories that will define the dream and
imaginations that move us globally, with a different twist. These new ventures
may be defining the new eclectic and cultural oriented startup ecosystems.”
––Amir Banifatemi, Managing Partner at K5 Ventures
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

﻿ 47
Intro
Boston has a long-standing history of entrepreneurship, with
a significant number of tech companies that have gone public.
Boston is second only to Silicon Value in Ecosystem Value with
$46 billion and ranked #5 in Startup Output with 3,700 to 4,500
active tech startups.
Today, the majority of Boston’s startups are science driven and
B2B, so they often flow under the radar of media coverage. A
notable success story highlighting that Boston is not only focused
on B2B models is WayFair. The eCommerce startup raised $305
million during its IPO and is currently worth more than $3 billion.1
Performance
3
Funding
3
Market Reach
7
Talent
Startup Experience
Growth Index
12
7
2.7
Boston 4
USA
Boston’s startup ecosystem is a worldwide leader in science and
technology-based enterprises in areas like pharma, life sciences,
biotech, and robotics. Entrepreneurs in Boston generally benefit
from a rich network of mentors and supportive organizations
such as Bolt, Techstars Boston, Harvard Innovation Lab, and
MassChallenge—the latter claiming to be the largest startup
accelerator in the world2.
At the core of Boston’s community are top-class higher education
institutions such as Harvard University, MIT and dozens of others.
Without a doubt, these schools produce some of the world’s
best and brightest minds, including plenty of entrepreneurial
and engineering talent. However, it takes on average 20% longer
for a startup to hire an engineer in Boston and salaries are 16%
higher than the North American average. These factors explain
Boston’s #10 ranking in Talent.
Boston ranks third in Funding with $4.4 billion in VC investments.
Interestingly, the average Series A investments in Boston are the
highest in the world.
1 Keohane, D. (2014)
2 MassChallenge. (2015)

Boston 48
﻿
Selected Findings
Boston’s #3 ranking in Performance is achieved
despite its 5th place in Startup Output and 6th
place in exit value, thanks to the higher average
valuation of its ~4,000 startups. This is due to the
ecosystem’s relatively higher number of late-stage
startups.
Boston easily ranks #3 in Funding with 70% higher
VC investments than L.A., which ranks #4.
Boston startups raise the highest amount for their
Series A globally with an average of $10 million to
$10.5 million.
Software Engineers earn $109,000 on average—
16% more than the North American average.
Boston startups share 40% more equity with their
employees than startups in Silicon Valley.
In Boston, 13% of startups have a founder with
hypergrowth experience (35% in Silicon Valley).
The total VC inflow of over $4 billion in 2014 underlines the
fact that startups have good access to funding, although the
ecosystem does not include many people who can cut checks
over coffee. With regards to the global benchmarking, Boston
has the third-strongest funding landscape in the world.
Ecosystem Partners: TechHub and Techstars
“Boston is known to have a very loyal pool of
talent, genuinely interested in a long and enriching
engagement with the startup companies they join.
And so they get rewarded with the amount of equity
that reflects that deeper relationship expectation
from both sides, founders and employees.”
––Eveline Buchatskiy, Director, Techstars
“We solve real hard problems. Not just at MIT—
this echoes around the whole ecosystem. We don’t
do consumer well. Some people think that’s a
weakness. I actually think thats a strength. Let the
Bay Area do flashy mobile stuff while we focus on
big problems and companies that are backed by
hard science.”
––Kyle Judah, Program Director at Martin Trust Center for
MIT Entrepreneurship
“An increasing number of European and Israeli
companies are moving to Boston. They are voting
with their feet. New York is expensive and California
is hard to recruit. Boston is a good mix of resources
and personnel.”
––Roger Krakoff, Managing Partner at Cloud Capital Partners

Boston 51
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
25%
Silicon Valley
23% -7%
28% 13%
North America Avg
National government rated positive
9%
11% 18%
N. America Avg 25% 176%
Silicon V
Immigration time
21
Silicon Valley
21 0%
North America Avg
22.8 10%
Top Policy Issues
Cost of living
Cost & availability of workspace
“Boston has depth across the board, from funding ecosystem to
engineering talent. It’s a very balanced ecosystem. It is particularly strong
in areas related to SaaS and all areas related to SaaS marketing, hard
innovation, infrastructure, gaming and e-commerce. It’s also super strong in
biotech of course, where it’s impact is much bigger than the size of the town
would suggest. The is extremely high density of general ecosystem around the
Kendall Square area, which is without a doubt one of the most vibrant hubs in
the world.”
––Fred Destin, Partner at Atlas Ventures
Immigration
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Tel Aviv is a prominent startup ecosystem in the global landscape,
ranked #5 overall. The city has an exceptionally strong startup
ecosystem with a well-balanced set of quality resources. With a
Growth Index of 2.9, it is the third fastest growing among the top
10 and second in Europe. It counts 3,100 to 4,200 active tech
startups, making it the 7th largest overall and #2 in Europe after
London.
Tel Aviv ranked #2 in 2012 but has since dropped. This change in
ranking is due in large part to improvements in our methodology
which de-emphasized the metric of density of startups per capita
(for more details see IV. Methodology).
Performance
6
Funding
5
Market Reach
13
Talent
3
Startup Experience
6
Growth Index
2.9
Tel Aviv 5
Israel
Startups in Tel Aviv traditionally focused on areas such as
enterprise IT, security, and networking technology. These startups
were often based on cutting-edge technology developed in the
Israeli military. Today’s entrepreneurs are engaged in far more
diverse sectors, such as ad-tech, eCommerce, big data, SaaS
and much more. The success story of Wix - a cloud-based web
development platform, which went IPO on the NASDAQ at a
$750 million valuation two years ago - illustrates this broader
diversification.
Tel Aviv’s consistent innovation over the last few decades has
given it a strong international reputation among startup investors,
and as such the ecosystem has plenty of capital at every stage
of funding (Seed to Series C+), giving it a rank of #5 overall in
funding. For this reason it comes as no surprise that 47% of all
investment rounds include foreign investors, 38% more than
European average.
Due to renowned universities such as Tel Aviv University and the
Israeli Defense Forces, local tech talent is abundant. While the
inflow of international venture capital is strong, the integration
of international talent remains weak (Israel has a 40% lower
1

Tel Aviv 53
﻿
Selected Findings
Tel Aviv claims the #1 spot outside of the U.S., #3
to #6 ranking in all Indexes except Market Reach.
With a 3.5x growth in exit values and 2x in VC
investments, Tel Aviv achieves the third highest
Growth Index in the top 10 (after Berlin and
London).
Tel Aviv startups attract more foreign capital than
any other European ecosystem (38% more than
the European average).
Tel Aviv’s #13 ranking in Market Reach is a mixed
story - while its local market presents a challenge
(131% smaller than the European average and
almost 3x smaller than Boston), its startups
rank #1 in Global Market Reach, with twice the
percentage of foreign customers of Silicon Valley.
Startups in Tel Aviv employ less females than
Silicon Valley, but slightly more than the European
average.
Tel Aviv has one of the best connected and
experienced startup communities around
the globe. 49% of all startup employees have
previously worked in a startup (21% above the
European average).
The ecosystem has the highest Startup Density
in Europe (between 0.85-1.15 startups per 1,000
inhabitants).
share of foreign employees than Silicon Valley). A more diverse
workforce may increase the performance of Tel Aviv’s startups.
Startups from Tel Aviv have had great success reaching customers
in the U.S., Europe, and Asia. This led them to having the #1
ranking in Global Market Reach, a sub-component of Market
Reach where it ranks #13 overall due to its small local market.
Many experts expect Tel Aviv to continue to increase its global
impact —especially in upcoming verticals such as the Internet of
Things, Big Data, and Bitcoin.
Ecosystem Partner: Start-Up Nation Central
“I believe the phenomenal success of the hi tech
sector in israel, is due to unique symbiosis between
small, fast, nimble start ups and established large
companies. As a result of rapid acquisitions, the
economy benefits from the infusion of expansion
capital, access to markets, strategic interests,
management know how and technical back up. The
acquired entrepreneurs then go on to immediately
build new companies.”
––Yossi Vardi, Investor
operating R&D centers in Israel, such as Apple,
Google, and Facebook, contributes to potential
collaboration between Israeli start-ups and global
players. “
––Inbal Arieli, VP Strategic Partnerships at Start-Up Nation
Central and Head of 8200 EISP
“In Israel, if you come with a big company’s
logo, your parents will ask you why you haven’t
started your own company. The dream in Israel is
innovation—it’s to build a successful company. If
you aren’t running your own company, it’s because
you haven’t found the right idea yet.”
––Amir Shevat, Global Startup Outreach Program Manager
at Google
“it’s no wonder Tel aviv ranked highest among
non US cities, with high similarity to the valley’s
culture and start up density. Yet, Tel Aviv enjoys an
arbitrage in valuations and talent availability.”
––Oded Hermoni, Venture Partner at Rhodium
“With an extremely vibrant startup ecosystem,
and ever strong technological talent — but a
very small domestic market -- Israeli startups aim
toward global markets from the day they launch.
The presence of more than 270 multinationals,
“We have ‘chutzpah’—drive, motivation, candid,
anything to get to their goals and overcome their
obstacles.”
––Gil Sadis, VP of Product at BlazeMeter

Tel Aviv 56
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
0%
Silicon Valley
23%
24%
Europe Avg
National government rated positive
0%
Silicon V
11%
Europe Avg
20%
Immigration time
91
Silicon Valley
21 -77%
Europe Avg
Top Policy Issues
Cost of living
Cost & availability of workspace
81 -10%
“A key lesson from Israel is that innovation is not just something that
goes on inside companies; it comes from a wider culture that fosters both
innovation and entrepreneurship. Israel is a country of immigrants — there
are over 70 nationalities represented in this tiny country. Two out of every
three Israelis are newcomers, or the children or grandchildren of newcomers.
Immigrants are natural risk takers since they were willing to uproot themselves
and start over.”
––Orit Mossinson, General Partner at Globe International Holdings VC
Taxes
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
London is in many ways the cultural and business capital of
Europe and with the second fastest Growth Index in the top 10,
has moved up in the rankings to #6 overall, from #7 in 2012.
With an estimated Startup Output of 3,200 to 5,400 active tech
startups and an Ecosystem Value of $44 billion, it is the fourth
largest ecosystem in the world, and the largest in Europe.
Research by the government-funded startup initiative Tech City
UK predicts that London-based tech startups will create around
10,000 jobs in the second half of 2015.1 Success stories such
as Powa Technologies (valued at $2.7B) and Shazam (valued at
$1B), which together have already created more than 1,000 jobs
in the United Kingdom, are strong indicators for the actualization
of this forecast.2
Performance
Funding
5
12
Market Reach
3
Talent
7
Startup Experience
Growth Index
13
3.3
London 6
United Kingdom
The London startup ecosystem stands out for its exceptional
access to affluent consumers and powerful corporations, solid
funding landscape, and ambitious government initiatives. The
ecosystem is a strong draw for world-class entrepreneurs and
startup employees, with a ranking of #7 in Talent, because of
its proven capacity to turn small-scale startups into globally
dominant category leaders.
London’s rankings in Market Reach (#3) and Performance (#5)
underscore the fact that this is an ecosystem that has come of
age. In London, we see many hyper-growth startups in diverse
sectors such as Media, Fashion, FinTech, and e-commerce.
The ecosystem’s downsides are in its culture and labor market.
Many experts have noted that its culture lacks a fully authentic
entrepreneurial spirit, with an aesthetic feeling similar to
London’s more established sectors. This is supported by our
Startup Experience Index, which shows that, by and large,
1 20,000 New Jobs to be Created by UK Tech Investment in 2015. (2015, May 29)
2 Austin, S. (2015)
1

London 58
﻿
Selected Findings
London is Europe’s largest ecosystem, above Tel
Aviv in number of startups, Ecosystem Value and
exit value.
London is the second fastest growing ecosystem in
Europe, after Berlin and above Tel Aviv.
It ranks #3 in Market Reach and is the only
ecosystem with a top 10 rank in both Local Market
(#4 globally and #1 in Europe) and Global Market
Reach (#4). Its startups count 50% of foreign
customers on average, 12% above European
average.
London is also the most diverse ecosystem in the
world with 53% of foreign employees and 18% of
female founders.
Seed and Series A investments are much higher
than the European average (17% and 26%
respectively).
London is very open to international Talent with a
20% shorter immigration time than the European
average.
23% of London-based founders gained previous
experience in hypergrowth startups. This is the
highest value in Europe (54% below Silicon Valley).
startups only give low amounts of equity to their mentors. To
stay competitive in a hot labor market, London startups have
been giving higher amounts of equity to employees compared
to other startup ecosystems. London startups also compensate
for the sub-optimal local hiring conditions by hiring 33% of
their employees from remote locations, which is 44% above the
European regional average. It’s a major trend for startups here
to outsource engineering work to Eastern European countries
such as Romania, which is only one timezone and a few hours
flight away.
Ecosystem Partners: Centre For Entrepreneurs and StartUp
Britain
“These findings provide strong analytical support
to the common perception of London as the
European city being as farthest ahead in overall
ecosystem strength: from funding to consumer
demand, and from international talent to diversity.
But there is still a significant upside when compared
to Silicon Valley. Other European cities would do well
to study London’s strengths.”
––Yoram Wijngaarde, CEO at Dealroom.co
“The international nature of London’s startup
ecosystem has always stood out, but the data here
makes it even more apparent. As a result of this
diversity, I have found the community is very open
and welcoming and companies are thinking globally
from day one.”
––Jess Williamson, Director, Barclays Accelerator, powered by
Techstars
“The great challenge is to make London not feel
debilitatingly expensive to live in. We need to create
ways to isolate non-millionaires from the rat race of
wealthy people who flock to London and buy large
properties that they don’t live in. Ideally, we’d be able
to insulate the people who are building and running
growth companies from the high priced property
market.”
––Alex Asseily, CEO at State, Chairman at Jawbone

Intro
As the largest city in America’s Midwest, Chicago is home to
between 1,800-3,000 active tech startups and is now ranked
#7 (up from #10 in 2012). Stakeholders including Mayor Rahm
Emanuel, local investors, and 1871 (an incubator that is home to
around 240 startups) have worked hard to measurably improve
the local startup ecosystem—and they have succeeded. Chicago
now has more than 40,000 tech jobs, 15,000 of which have been
created in just the last four years.1 Given the fact that Chicago
has achieved the third highest Startup Output growth rate in this
year’s ranking, this trend is likely to continue.
Performance
Funding
Market Reach
8
12
5
Talent
11
Startup Experience
14
Growth Index
2.8
Chicago 7
USA
A key reason for Chicago’s growth is, without a doubt, the
exceptional success of a few local startups. Chicago is the
birthplace of Groupon and GrubHub, and is currently home to
over ten unicorns - startups with a valuation over $1 billion. In
the case of Chicago, the high density of such startups significantly
accelerates the circulation of both wealth and proven expertise
within the ecosystem. Chicago’s startup hub also benefits from
the established corporate community, which is reflected by its
ranking as the 5th strongest local market of all startup ecosystems.
For the time being, the relatively young startup ecosystem is
inhibited by a still developing funding landscape. According to
experts, its Series A investments are picking up in size and pace,
but both seed and Series A investments are still a quarter below
the North American average. Another area for improvement is
in the startup culture. One data point we interpret as having a
negative effect on culture is the limited willingness of founders to
give equity to advisors and employees. Chicago-based founders
give 81% less equity to their employees than the North American
average.
Ecosystem Partner: 1871
1 Dallke, J. (2015

Chicago 63
﻿
Selected Findings
Highest Growth Index of all U.S. ecosystems and
4th among the top 10, thanks to a 2.4x growth in
VC investments and the 3rd fastest growth for # of
startups.
Chicago’s best index ranking is #5 in Market Reach.
While its startups benefit from the 5th largest
local market among top 20 hubs, it trails in Global
Market Reach, namely with a 66% lower proportion
of foreign customers.
Chicago startups also operate in fewer languages
than the regional average (-30%).
With 85% Chicago has the highest rate of
exclusively local funding rounds in North America
(40% above average).
Dilution is 23% higher than in Silicon Valley.
Chicago ranks #11 in Talent with good quality and
availability - the time to hire a software engineer is
12% shorter than North America’s average.
With an average of 5%, Chicago startups provide
the lowest equity share for their employees in
North America (81% below average).
“Chicago is a heart-filled, thriving ecosystem of
ingenuity and talent that can only be found in the
bustling midwest. Often described as friendly and
hard-working, your typical Chicago entrepreneur
is solving problems across the board. Chicago
is enjoying a business renaissance. I have been
working and living in Chicago for nearly 30 years
and I’ve never felt the city alive with so much energy
as I do walking around this enchanted town.”
––Don Bora, Partner/Owner at Eight Bit Studios
“I arrived in Chicago at the turn of the year
from London, and was instantly welcomed
into the startup community. The ecosystem in
Chicago is supportive, enthusiastic and endlessly
energetic. Dedicating time to help other people
in the community is expected; sharing contacts,
experiences and resources are the norm. The
ecosystem is compact, open and full of innovation:
an excellent breeding ground for investors and
entrepreneurs.”
––Gregory Kris, Serial Entrepreneur
“The beauty of Chicago is that no individual
sector accounts for more than 15% of its GDP.
Chicago boasts the most diverse economy in the
U.S., well-balanced across finance, manufacturing,
healthcare, real estate, and technology. And that
provides a fertile field for B2B sales-led models as
well as related technologies to scale these industries
online. While the city cannot compete with the best
of Silicon Valley in terms of UX design or B2C growth
hacking or any massive VC-led land grabs, we are
also not beholden to such immediate investor return
driven models. Indeed, the discipline forced on us in
having to bootstrap or internally fund through client
sales, the efficiency required for such bureaucratic
alignment, and the patience afforded from our more
humble cap tables actually provides a briar-patch
type defense against all the new Silicon-Valley hot
money start-ups.”
––Christopher Nyren, Founder of Educelerate

Chicago 66
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
24%
Silicon Valley
23%
-2%
28% 19%
North America Avg
National government rated positive
16%
16%
Silicon V
11%
North America Avg
-32%
25% 59%
Immigration time
21
21
Silicon Valley
N. America Avg
21
0%
22.8
10%
Top Policy Issues
Formation and training of software engineers
Taxes
Cost of living
“As a transplant from San Francisco, I have had the pleasure of watching
Chicago really come into it’s own. When I first arrived here in the early 2000’s,
the tech entrepreneurial community was reeling from the dot come crash and
a negative sentiment from the media and local bloggers. There wasn’t much
swagger here. But what it did have is a strong core of people who believed in
what was possible. The JB Pritzkers, The Steve Millers, the Matt McCalls, Mayor
Daley, David Weinstein and all of the other believers. And the entrepreneurs
started to emerge, companies like GrubHub, Cleversafe and Groupon came
on to the scene and the entrepreneurial community started to get some
mojo. Then entrepreneur support organizations like 1871 and more capital
(both from the coasts and locally) the new Mayor reinvigorated City and
State involvement (as contributors and supporters) and then some successes
started to happen, with exits like Braintree, GrubHub and Groupon. While
that was going on, the bigs started to step up with companies like Google,
Microsoft, Cysco and locals like Walgreens and Execlon all started to dabble in
the local tech/ entrepreneurial scene. More and more entrants like Techstars
and Impact Engine with their mounds of experienced entrepreneurs like Troy
Henikoff and Sam Yagan spent more and more time focused locally and
giving back. Now there is a thriving community that isn’t trying to be Silicon
Valley or Silicon Alley, but has it’s own identity, with it’s own ecosystem that
is turning the Chicagoland area into a force. It’s been excited to witness the
transition I have seen over the past 10+ years.”
––Chuck Templeton, Founder of OpenTable
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Seattle has a deep history of software expertise due to the
prominence of local companies like Microsoft and Amazon. Our
research suggests that Seattle’s cluster is currently home to 1,500
and 2,200 active tech startups. Although Seattle dropped four
positions from #4 in 2012 overall to #8 in 2015, Seattle remains
a vibrant place for tech entrepreneurship.
The state’s Employment Security Department (ESD) estimates
that around 12% new job growth1 has been created during the
last 2 years in Seattle’s tech space. This growth has been spurred
by recent success stories such as PayScale and Attachmate, as
well as tech powerhouses from Silicon Valley such as Google,
Facebook and Apple, opening fast-growing second offices in
Seattle.
Performance
12
Funding
11
Market Reach
12
Talent
4
Startup Experience
3
Growth Index
2.1
Seattle 8
USA
Seattle’s startup ecosystem ranks #4 for Talent and offers a
higher concentration2 of software developers than any other
tech region within the U.S. Compared to their peers in Silicon
Valley, startups in Seattle resort 85% less often to hiring remote
employees. Also, many Silicon Valley entrepreneurs relocate
to Seattle due to high living costs and rising salaries. Based on
Seattle’s geographic proximity to Silicon Valley and its lower cost
for engineering talent, Seattle has become an attractive option
for talented startup entrepreneurs and the tech-savvy workforce
alike3.
Seattle’s weak spot is funding. While it is sufficient to fund a
major share of promising early stage startups, a lack of big VC
funds causes a noticeable gap of later-stage investments—a
key reason why the Seattle ecosystem is not among the global
elite in 2015. Competing ecosystems like Boston or Los Angeles
experienced 2.5x and 3.3x higher VC investments, respectively,
1 Kalning, K. (2015, January 9)
2 Partovi, H. (2015)
3 Cook, J. (2015)

Seattle 68
﻿
Selected Findings
Seattle ranks #12 in Performance and #11 in
Funding.
At 2.1, its Growth Index is slower than average and
similar to Silicon Valley’s despite fast growth rates
in both exit value and VC investments. Its Startup
Output growth is second to last among the top 20.
Seattle ranks #3 in Startup Experience and #4 in
Talent—in line with its long history of tech success.
It ranks #12 in Market Reach because of its smaller
local market and comes in with a next-to-last
finish in the Global Market Reach sub-index, with
71% less foreign customers than North American
average.
Series A rounds are 20% lower than regional
average.
While on average one out of five founders in
North America are female, it is only one in
ten in Seattle.
With more than two equity compensated advisors
on average, Seattle-based startups have the
highest regional average.
in 2013 and 2014. However, Seattle’s venture capital is growing
40% faster than the U.S. average, so the funding gap is likely to
narrow in the future.
Ecosystem Partners: Microsoft Ventures and TechAlliance
“Seattle has transformed over the last 12 to 18
months. There has been an influx of fresh talent and
less brain drain to Silicon Valley, with Facebook,
Dropbox, Uber, Google and others opening offices in
Seattle. Being just a 2 hour flight away from Silicon
Valley, Seattle offers a great alternative for founders.
They benefit from the close proximity to investors in
SV and the lower cost, great talent plus high living
standard in Seattle.”
––Jon Staenberg, Founder and CEO at Hand of God Wines
“Seattle is a dynamic technology community,
anchored by large players such as T-Mobile,
Amazon, Expedia, and Microsoft, as well as a
thriving startup ecosystem that has spawned
companies such as Zillow, Zulily, and Tableau. It
is not a surprise that people from California—and
elsewhere—are locating to Seattle. It is quite simply
a more pleasant—and cheaper—place to live. A
recent report by Seattle real estate company Redfin
found that Seattle is increasingly being chosen in
searches by Bay Area residents who are looking for
new homes.”
––John Cook, Co-Founder at GeekWire

Seattle 71
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
35%
Silicon Valley
23% -33%
28% -19%
North America Avg
National government rated positive
35%
Silicon V.
11% -69%
23% -28%
North America Avg
Immigration time
21
Silicon Valley
21
North America Avg
0%
23 10%
Top Policy Issues
Taxes
Cost & availability of workspace
“Seattle is an amazing city with rich culture and expanding opportunities
that are creating tremendous fast-paced growth resulting in housing, traffic,
and cultural challenges. We are the cloud computing capital of the world,
with many additional thriving tech sectors, while having to import talent to fill
the growing number of tech jobs available. Initiatives are underway to create
more tech education for underserved minorities and women to fill this gap,
and we realize these are good problems to have.”
––Brett Greene, CEO at New Tech Seattle
Cost of living
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
After a decade of slow growth, Berlin’s tech scene has grown
very fast since 2010 and was the fastest growing hub in 2014.
It was ranked #15 in 2012 and is now #9 in 2015. According to
our data, Berlin is home to between 1,800 to 3,000 active tech
startups. By 2020, Berlin’s startups could potentially create as
many as 40,000 new jobs.1
Startups in the Berlin ecosystem have historically been successful
in markets like eCommerce, gaming, and marketplaces, with new
startups showing potential in other verticals such as SaaS and
adtech. A strong creative scene and low living costs have resulted
in a soaring inflow of national and international tech talent.
Performance
7
Funding
8
Market Reach
19
Talent
8
Startup Experience
8
Growth Index
10
Berlin 9
Germany
Berlin’s weak spots have traditionally been the vibrancy of
its funding landscape and lack of exits. Yet its recent history
has more than reversed that trend. With two back-to-back
IPOs above $6 billion in the Fall of 2014 (Rocket Internet and
Zalando), an exponential growth in exit volume due to startups
like Sociomantic, Wunderlist, and Quandoo, and more than 2x
growth in VC investment, there is no doubt the Berlin is on its
way into the upper echelon of startup ecosystems.2
By surpassing the $2 billion mark in VC investments, the ecosystem
attracted even more growth capital than London last year. This
amount, however, was raised by a few rapidly scaling startups
such as Delivery Hero (~$520 million) and does not lead to the
conclusion that Berlin’s funding landscape has come of age.
Experts argue that the rigid regulatory investment environment,
as well as a weak local exit market curb Berlin’s growth. As a
consequence it remains a challenge to raise late-stage funding
in Berlin. Berlin’s startup ecosystem has established a strong
national pull. Its next emerging step is to become more of an
international attraction.
1 McKinsey Berlin. (2013)
2 Valerio, D. (2015)
1

Berlin 73
﻿
Selected Findings
Berlin tops our Growth Index among all measured
ecosystems with a maximum score of 10, (twice
that of #2-ranked Bangalore), thanks to an
explosion in exits and VC investments.
Berlin’s VC investments ranked #2 in Europe, just
behind Tel Aviv, and #8 among the top 20.
Berlin has the second highest Startup Experience
in Europe, with a 20% higher percentage of
employees with prior experience in a startup and
the highest number of advisors with equity in
Europe (yet still 51% below Silicon Valley average).
It ranks third among Europe’s six top 20 hubs in
Global Market Reach, namely due to a 19% lower
proportion of foreign customers.
With 49% foreign and 27% female employees,
Berlin is the most gender equal and second most
diverse ecosystem in Europe.
Berlin’s dilution rate is 10%, which is only about
half of the European average (19%).
Berlin-based Software engineers earn less than
half of their Silicon Valley counterparts (~$60,000
vs. ~$120,000).
Ecosystem Partners: Microsoft Ventures, Gruenderszene, and
TechBerlin
“Being situated in its geographical centre, Berlin
has become the beating heart of the European
startup community. A colorful and vibrant city,
where tech innovators, digital entrepreneurs and the
creative class are jointly creating great international
startups.”
––Marius Sewing, CEO in Residence at Microsoft Ventures
Accelerator Germany
“Times are changing and capital is following
the talent, so that there are more and more local
financing sources available on the ground in Berlin.
I would argue that you can now raise a good Seed
(a few hundred thousand to million-ish) or a smaller
Series A round (up to 2-3 million) entirely in Berlin
and this from people who really know what they are
doing and can be helpful.”
––Pawel Chudzinski, Managing Partner at Point Nine Capital
“The Berlin ecosystem is going to continue to
mature. With the next batch of successful exits,
capital will finally flow to Berlin in an order of
magnitude that matches the city’s wealth of ideas.
Once the funding ecosystem comes anywhere close
to what exists in London or Silicon Valley, Berlin will
experience another phase of transformative growth.”
––Hannes Klöpper, CEO at iversity

Berlin 76
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
39%
Silicon Valley
Europe Avg
-40%
23%
24% -39%
National government rated positive
37%
Silicon V
Europe Avg
11% -71%
20% -46%
Immigration time
83
Silicon Valley
21 -75%
Europe Avg.
Top Policy Issues
Local regulations
National Laws
Taxes
81 -2%
81
“Berlin stood out a long way for us when we were looking for a place
to establish SoundCloud, not least for the fact that it offers such a vibrant
intersection of artistic creativity and technological knowledge. The city
operates very much on a mantra of ‘going your own way’; a counterculture
mind set that embodies the startup spirit of looking at the world differently
and trying to do something better. We are always hearing about fresh ideas
and interesting opportunities cropping up across the city, and the network of
fellow startups we’re proud to be a part of makes our working lives that bit
more interesting every day.”
––Alexander Ljung, Founder & CEO at SoundCloud
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Singapore is known for being one of the world’s top financial
centers, and increasingly as the premier startup launchpad of
Southeast Asia. Its business friendly environment is a fertile
ground for startups, with 2,400-3,600 active tech startups calling
the city-state home. Singapore climbed seven ranks to become
Asia-Pacific’s1 first ecosystem to the top 10 of our ranking.
Stakeholders agree that the government’s support of Singapore’s
startup ecosystem played a major role in its rapid development.
Initiatives include tax incentives for startups and investors
and government funds. The government’s sizable $1 billion
Technopreneurship Investment Fund offers up to $2 million per
startup. This program attracted entrepreneurs from the entire
APAC region and other parts of the world.2 Paired with its strong
VC community, in a class of its own in Southeast Asia, Singapore
makes rank #9 in the Funding Index.
Performance
11
Funding
9
Market Reach
9
Talent
Startup Experience
Growth Index
20
9
1.9
Singapore 10
Singapore’s geographic location and deep business relationships
with booming Asian markets means local startups benefit from
access to affluent consumers and multinational corporations
to scale their business. Recent success stories such as Garena,
valued at above $2 billion in an investment by a Canadian
pension fund, showcase the scaling abilities of this ecosystem. It
also highlights its international attraction: investors, startups and
accelerators open offices in Singapore, confirming its place as
Asia’s central startup hub and contributing to its top 10 ranking
in Startup Experience.
Singapore enjoys a significant inflow of talent, yet it is still difficult
for startups to find experienced software engineers because of
the competition of larger companies and a culture that does not
value risk-taking.
1 excluding China, South Korea and Japan
2 Youn, S. (2015)

Singapore 78
﻿
Selected Findings
At 1.9 Singapore had one of the lowest Growth
Index among the top 10 despite above average
growth in exit value, mainly due to anemic growth
in VC investments.
Nevertheless Singapore still ranks #9 in Funding,
second only to Bangalore in the APAC region.
Singapore ranks #9 in Market Reach, mostly
because of its strong global scaling performance.
49% of its customers are located abroad, which is
the highest value for the APAC region.
More than 52% of all Singapore startup employees
are foreign born (46% above APAC average).
Talent is Singapore’s biggest bottleneck (ranked at
#20). It takes 17% longer to hire an engineer than
in Silicon Valley and salaries are higher than in the
rest of the APAC region.
With 1.27 mentors per startup (26% above
regional average), Singapore has the highest
number of advisors with equity in the region.
With 10% equity to employees, Singapore has the
highest share in the APAC region (14% above the
regional average).
Ecosystem Partners: Infocomm Investments, Startupbootcamp,
TechInAsia, and The Innovators Institute
“Singapore is one of the easiest place in the world
to start a business, and is in the backyard of a very
exciting South-East Asia region. I feel like a kid in a
sandbox.”
––Zhihan Lee, Co-Founder and CEO at BagoSphere
“There has never been a better time to be an
entrepreneur in ASEAN, and specifically in Singapore
- the past few years has seen a huge influx of
investor money, incubators/accelerators, and
corporate venturing fuelling the startup ecosystem.
Many founders and startups like to set up here, due
to the strong government support and businessfriendly environment for technology startups.
Although a company’s headquarters may be based
in Singapore, the real market opportunity actually
lies in the surrounding emerging economies and
their large growing middle class, e.g. Indonesia,
Thailand, the Philippines. A region of 80m
households.”
––Peng Ong, Managing Director at Monk’s Hill Ventures
“Singapore has always asked the question “How
can we stay competitive?”. The country that is purely
dependent on import of any of its resources gets
it. And so the start-up ecosystem gets similar levels
of attention from both the local government &
ventures, attracting the third largest VC investments
in the APAC region, after China & Japan. Singapore
for many is the “easy” gateway to (South-East)Asia.
The legal, financial, political...virtually any stability of
the country is infamous - literarily everything works.
The strategic proximity to all the surrounding superfast growing markets, such as Indonesia (population
250m people) adds to this. So it’s no surprise all the
hubs for the once US startups are based here (from
Uber and Airbnb, to Facebook or Google).”
––Tomas Laboutka, Co-Founder and CEO at HotelQuickly
“Singapore is well-positioned to be the leading
FinTech Hub for South-East Asia, given the access
to key decision makers in financial institutions,
the expertise of mentors and investors. Because
Singapore has deep business relationships with
all Asian countries, startups can leverage these
corridors and scale efficiently in the region. The
challenges lay in talent.”
––Markus Gnirck, Co-Founder & Global COO at
Startupbootcamp FinTech

Singapore 81
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
7%
23%
225%
20% 183%
Silicon Valley
APAC Avg
“Singapore turns 50 this year. If it was a company, it would probably be
one of the most remarkable entrepreneurial success in recent history. In this
sense, I think the basic tenets of entrepreneurship such as innovation and
hard work have always been part of the Singapore DNA. After a generation
of infrastructure development and wealth accumulation, I think Singapore
is ready to project its dynamism into the region, especially with plans to
integrate the huge and growing economies of South East Asia.”
National government rated positive
5%
Silicon V
APAC Avg
11% 125%
19% 308%
Immigration time
75
Silicon Valley
21 -72%
APAC Avg.
Europe Avg.
Top Policy Issues
Cost of living
Workspace
Immigration
79 5%
––Danny Tan, CEO at HipVan
“Singapore is a perfect symbiosis of high quality of living and
entrepreneurial activity. The uptick of entrepreneurship over the past five years
has been phenomenal. Singapore’s ecosystem is spearheading the region
including dozens of large VC funds, many incubators and accelerators, and
most importantly a lot of local and international talent willing to join the ride.”
––Rico Wyder, RVP of Product at Tickled Media
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Paris has the second largest GDP for any metropolitan region in
Europe and incorporates one of the continent’s largest dedicated
business district: La Défense. As the government has begun to
acknowledge the importance of tech startups, the availability of
public grants, subsidies, and loans has increased. The French
capital boasts of between 2,400 and 3,200 active tech startups
and has maintained its #12 rank.
Parisian entrepreneurs have a reputation for building dominant
startups in industries such as EdTech, the sharing economy,
collaborative consumption, and artificial intelligence.
Performance
13
Funding
13
Market Reach
6
Talent
16
Startup Experience
15
Growth Index
1.3
Paris 11
France
Two of the ecosystem’s recent success stories are Criteon
(worth more than $2B) and BlaBlaCar (undisclosed valuation,
but expected to be the next French billion dollar company1). It is
because of these and many other great startups that Paris-based
entrepreneurs are beginning to attract attention from U.S.-based
venture capitalists. For example, Fred Wilson of Union Ventures
did his first French investment in La Ruche Qui Dit Oui, and Palo
Alto-based The Hive just invested in Snips.net.
With only $1 billion in VC investments, an influx of capital is much
needed, and particularly so for later-stage funding. Finally, Paris’
weakest indicator is not funding, but Talent (#19)—despite the
high-quality education system. The city’s best engineers tend
to favor large, stable employers rather than fledgling, or even
established startups.
Ecosystem Partners: France Digital, TheFamily, NUMA, and 50
Partners
1 Picker, L., & David, R. (2015)
1

Paris 83
﻿
Selected Findings
Paris’ Growth Index is the second lowest in the top
20. It exhibits anemic growth in Startup Output
and exit value, and a surprising 7% reduction in VC
investments.
“In the last 5 years the Parisian startup scene
simply boomed. From 1 accelerator in 2009 there
are now more than 50 incubators verticalized on
every sectors. ... Being an entrepreneur in Paris is no
more anecdotical!”
––Maëva Tordo, Co-Founder and Head of Blue Factory
It ranks a notable #9 in Market Reach, with the 4th
largest local market among the other top 20 hubs,
but a 33% lower percentage of foreign customers
than European average.
Seed rounds are 13% higher than the regional
average, but Series A are 30% lower.
Paris ranked #16 in Talent, placing it in the lower
tier in both quality and availability. Time to hire
an engineer is the longest in Europe (14% above
regional average and 26% above Silicon Valley
average).
Only 22% of employees are from abroad (35%
below regional average), resulting in little diversity.
“Paris is the ‘techiest’ hub in Europe, with a lot of
Internet of Things, Big Data and Artificial Intelligence
companies being created each year.”
––Rand Hindi, CEO at Snips
“Unicorns like Criteo and BlaBlaCar are still an
exception for the Parisian tech scene, but they
represent a larger entrepreneurial movement which
is taking over French society. While there are still
many challenges to overcome, this new generation
is making entrepreneurship the new politics. With
top-quality engineering schools, a booming network
of experienced entrepreneurs and a growing supply
of capital from local and international funds, Paris
has all it needs and it’s well on its way to becoming a
tech powerhouse.”
––Erika Batista, Head of Partnerships at TheFamily
“In Paris we don’t have oil, but we do have
startups! Thanks to billion dollar valuations like
Blablacar and Deezer, the Parisian tech ecosystem
has seen a boost both in volume and quality of
new projects. The government is also pushing the
ecosystem along with financial incentives, making
France a fiscal paradise for innovative companies.”
––Clément Alteresco, Co-Founder and CEO at Share Your
Office / Bureaux A Partager
“As there so few investors, in France, that take
risks with the entrepreneurs at the beginning of their
Journey, we have developped an art of the startup
bootstrapping.”
––Jean Francois Ruiz, CNO and CMO at PowerOn
“Because Entrepreneur is a French word, as well
as Revolution.”
––Maurice Gopikian, Co-Founder and President at Orevon

Paris 86
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
23%
Silicon Valley
Europe Avg
1%
23%
24% 2%
National government rated positive
26%
Silicon V
Europe Avg
11% -58%
20% -23%
Immigration time
70
Silicon Valley
21 -71%
Europe Avg.
81 16%
81
Top Policy Issues
Cost & availability of workspace
Taxes
Attractiveness of ecosystem to foreign investors
“You certainly know Paris. City of lights, museums, cafés, restaurants and
romantic getaways. Let us face it: startup is not in this list and unicorns
don’t seem to drink from the Seine river. But the city that gave the word
‘entrepreneur’ and the engineer Eiffel to the world knows a thing or two when
it comes to revolutions. The change that I have witnessed from the front line in
the last 15 years has been spectacular. Champions have arisen: Free Telecom,
Vente-privée, Parrot, Criteo, Blablacar, ... and the seeds are so much more
abundant and the roots much deeper. You can now, every single day, attend
a good tech, english speaking, event, in the city of cheese and unpolite waiters.
The young generation dreams of electronic sheeps and every single student I
met recently was considering to go for the entepreneurial journey sometimes,
and quite soon if possible. France is now the number one country in Europe
for VC investments. And if one swallow does not make a summer, I guess a few
first tier US VCs now hunting in Paris is a strong sign. A french proverb says
“Paris has not been built in one day”. Silicon Valley neither I guess. And all the
great cities and ecosystems in the world Tel Aviv, London, Berlin, Stockholm,
New York, ... don’t wait for us. From my experience, the only metrics that
counts is acceleration. And I know Paris is moving fast these days. I am sure it
will pay and give you one more reason to visit Paris next time.”
––Stéphane Distinguin, Founder and CEO at FABERNOVEL
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Sao Paulo is the economic capital of Latin America. The city has
around 20 million people and is a vibrant cultural and financial
hub with more than $2 billion in daily trade on its local stock
exchange. Although affected by Brazil’s economic downturn, this
previously fast-growing ecosystem moved up one position (from
#13 in 2012) and is currently home to around 1,500-2,700 active
tech startups. With a Growth Index of 3.5 it was the third fastest
growing ecosystem in the top 20.
Notably, 2014 VC investments were higher than in Seattle and
just below Tel Aviv. The active VC climate is highlighted by notable
Silicon Valley funds like Redpoint Ventures and 500 Startups.
However, the majority of venture capital funds have limited longterm experience, having only started their first investment cycle
after 2009.
Performance
9
Funding
13
Market Reach
11
Talent
19
Startup Experience
19
Growth Index
3.5
Sao Paulo 12
Brazil
Sao Paulo boasts the best talent of any South American startup
ecosystem. Recent success stories like Dafiti, Netshoes, and
EasyTaxi have inspired more talent to reconsider the corporate
career path and see entrepreneurship as a viable alternative.
Sectors such as eCommerce and SaaS remain strong in Sao Paulo,
while new startups with more innovative business models are
beginning to gain traction in the fields of mobile, marketplaces,
and services.
Finally, the recent economic downturn, combined with the lack of
exits, have lowered investor confidence in the ecosystem. Other
key challenges include its relative high costs, bureaucracy, and
its burdensome transportation system. As the city gears up to
position itself not just as the Latin American startup capital, but a
top 10 ecosystem, overcoming these problems will be essential.
Ecosystem Partners: Startup Brazil, Startup Farm, and ABStartups

Sao Paulo 88
﻿
Selected Findings
It ranks #7 in Funding. The average seed funding
amount is half of Silicon Valley, and Series A is 14%
lower. Despite the presence of some marquee
international institutional investors, 86% of all
investment rounds count only local investors.
Sao Paulo ranks #11 in our Market Reach index
due to the size of its local and cultural markets. It
captures the last spot in Global Market Reach with
its startups counting only 18% foreign customers.
At 7%, the proportion of foreign employees is the
third lowest in the top 20.
Sao Paulo ranks #19 in Startup Experience. The
average number of mentors with equity per
startup is less than one (1.94 in Silicon Valley).
The proportion of employees with prior startup
experience is 73% lower than in Silicon Valley.
“Sao Paulo congregates the main factors for a
successful startup ecosystem, including the highest
concentration of startups, PE/VCs, angel investors,
and global companies in the LatAm region.”
––Guilherme Junqueira, Executive Manager at Brazilian
Startups Association
“There is a lot of opportunity in Brazil. We have
big problems like education, health, etc, that can be
fixed by startups. It is a huge local market.”
––Gustavo Caetano, CEO at SambaTech
“The main barrier holding back more capital
flowing into startups is the supply of good
entrepreneurs with good ideas.”
––Felipe Matos, CEO at Startup Farm

Intro
Russia’s capital city accounts for about 22% of the Russian GDP
and is home to 2,300 to 3,800 active tech startups. Moscow
moved up by one position in our ranking (from #14 in 2012), but
recent political and economic turmoil has considerably affected
its growth. It has the lowest Growth Index in the top 20, with very
slow to no growth recorded across the board.
Entrepreneurship has become trendy and aspiring founders
have opportunities to form talented teams, secure VC funding,
and test new business models locally (Moscow is #8 in Market
Reach). Success stories that majorly contributed to the
development of the Moscow ecosystem are Yandex, the Russian
version of Google, and Mail.ru, which went public in 2010 and
2011 respectively, raising $2 billion in total capital. Despite these
successes, Moscow still falls far short in exit value and ranks
only 17 in Performance Index, despite having the tenth highest
number of startups.
Performance
17
Funding
15
Market Reach
8
Talent
2
Startup Experience
Growth Index
20
1
Moscow 13
Russia
Moscow’s higher education infrastructure feeds the ecosystem
with some of the best software engineers in the world, namely
taking the top spot in the TopCoder challenge. Yet, annual
software engineer salaries are just a fraction of those in mature
ecosystems. With salaries averaging less than $40,000 per year,
employing a software engineer in Moscow is 75% cheaper than
in Silicon Valley, a difference that was accelerated by the Ruble’s
plunge at the end of last year. Combined with a 24% faster time
to hire, these factors explain why Moscow ranks #2 in Talent.
Access to funding has arguably improved in recent years.
Historically, investments were concentrated in late stage funding
rounds, while earlier stage startups had poor access to capital.
This funding gap decreased in 2011, when numerous startup
education programs, coworking spaces, and venture funds
appeared.
1

Moscow 93
﻿
Selected Findings
Moscow has the third largest Startup Output
among Europe’s top 20, but the lowest Ecosystem
Value.
Its very low immigration success rate (9%)
underlines why Moscow has the lowest proportion
of foreign employees in Europe with only 5% (1/6th
the European average and 1/9th of Silicon Valley).
Moscow ranks #8 in Market Reach thanks to a
large local and national market, and despite a
#15 ranking in Global Market Reach. Its average
proportion of foreign customers (31%) is
significantly below the European average (45%).
Initiatives such as the $2.7 billion strong Skolkovo Innovation
Center1 and the Internet Initiatives Development Fund (IIDF)
have been particularly influential. With regards to foreign venture
capital, the high percentage (80%) of investment rounds with
local-only investors underscores the fact that the political conflict
has led many international investors to withdrawing their funds.
crowded and one of the most developed in Europe but few people know.”
Moscow has many areas with room for improvement, especially
their Startup Experience, where they rank last among the top 20.
Its startups count the lowest number of advisors in the world and
give 49% less equity to their employees compared to startups in
the rest of Europe.
“We had pretty bad consumer product and service
design during the Soviet union period. That’s why
many good companies are built around ‘better’
customer experience”
Ecosystem Partners: #tceh, IIDF, and Russian Ventures Company
“We currently see the first generation of venture
capitalists and tech entrepreneurs here in Moscow.
The latter are educated and ambitious but often
lack the skills to scale their business beyond the local
market.”
––Gulnara Bikkulova, Capital and Market Access Programs
Director and Executive Board Member at RVC
“The startup boom is really here. In the last several
years we saw a lot of amazing companies who had
appeared on the market in marketing technologies,
fintech, security, sales automation and e-commerce
startups. The Russian startup market is very active,
1 Strong, R. (2015)
––Maxim Chebotarev, Head of Business Angels Department
at Internet Initiatives Development Fund (IIDF)
––Igor Khmel, Managing Director at Sberbank Digital
Ventures
“The Russian startup-scene is relatively young.
But it has a growing number of mature innovative
companies who can successfully compete on global
level. Recent political changes, fallen ruble and
decreased purchasing power of russian customers
are forcing more and more startups to think
globally. Talented engineers, managers, office spaces
with new ruble exchange rate are very affordable.
Venture capital availability is better than ever and
even government is trying to support innovative
projects with number of different programs. A new
chapter of russian startup life is opening.”
––Michael Balakin, Managing Director Russia at sociomantic
labs

Moscow 96
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
16%
Silicon Valley
Europe Avg
23%
42%
24% 44%
National government rated positive
11%
Silicon V.
Europe Avg
11% -4%
20% 77%
Immigration time
50
Silicon Valley
21 -59%
Europe Avg
Top Policy Issues
81
63%
“The crisis has changed the startup ecosystem in Moscow. Now
entrepreneurs have fewer opportunities to raise money. They have to take
greater risks. That is why many young high potentials prefer to be employed
by big international or government owned companies than to found a
startup. Unfortunately, some of the brightest minds choose to move to the
Silicon Valley, Singapore or EU and start a company there. But it does not
mean that startup ecosystem has been destroyed. Great companies with
best teams can survive in Moscow. Entrepreneurs got to find the way to use
crisis as an opportunity to make money. People in Russia are trying to save
more money on products and services and startups are trying to help them.
IT is the best way to decrease the costs for many of the offline services and if
entrepreneur does it well, he/she will get as much money as he/she needs.”
––Alena Popova, CEO at Gov2Project
Cost of living
Cost & availability of workspace
Taxes
If you are in a fancy bar in Moscow, it’s cool to tell to a girl that you are
an Internet entrepreneur. You can hear startup pitches all around when
having a breakfast and there are more accelerators than startups to fit them.
Tough the funding capabilities (even the local ones) have seriously decreased
during the sanctions war. Looks like a good motivator for Russians to make
something outside of Russia.
––Alex Alpern, CEO & Founder at Webinar-COMDI
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Austin’s tech sector originally formed due to the presence of
industry giants such as Dell and IBM. The city’s startup ecosystem
steadily formed as an outgrowth of that gravitation center, and
over the last decade has managed to develop a diverse portfolio
of startups engaged in hardware, software, and software services.
The cluster consists of 1,600 to 2,200 active tech startups and
now ranks #14 overall.
Recent success stories include HomeAway (market cap of
around $2.84 billion) and RetailMeNot (market cap of around
$850 million), which have together created over 5,000 new jobs.
Thanks to these and other successful exits Austin ranked #13
in exit value. However Austin trails in the Funding Index with an
18th position in VC investments, especially due to lower-stage
funding.
Performance
16
Funding
14
Market Reach
18
Talent
5
Startup Experience
2
Growth Index
1.9
Austin 14
USA
Austin’s consistent performance in the tech sector has led to
a tech-savvy workforce, counting over 100,000 people, a high
number considering its 1.8 million population. As local talent is
not only skilled but also slightly cheaper than the North American
average, the startup ecosystem ranks #6 in Talent. Yet, Austin
supply can still not keep up with demand. A recent study by the
Austin Technology Council pointed out that the local demand
for skilled tech workers will outpace supply by more than 2,000
people each year1. This figure is also in line with our numbers for
the average amount of time it takes to hire tech talent in Austin,
21% longer than the Silicon Valley average. Austin ranks #2 on
our Startup Experience Index due to a proportion of employees
with prior startup experience even higher than Silicon Valley
(52% vs. 48%) and a high average number of advisors.
Ecosystem Partners: Techstars and Central Texas Angel Network
1 An Assessment of the Workforce Pipeline in Austin’s Technology Sector. (2015)

Austin 98
﻿
Selected Findings
In Market Reach Austin ranks last among U.S.
ecosystems in the top 20 due to its small local
market and low Global Market Reach score. It
has the second lowest percentage of foreign
customers (24%) and second-lowest number of
product languages at 1.4.
Seed funding in Austin is 8% higher than the
regional average. Series A, is 18% lower than the
regional average, indicating a funding gap.
The Startup Density in Austin is 25% higher than
the North American average.
“The talent and mentor network in Austin is
growing both in size and sophistication. Capital
Factory & Techstars are leading Austin’s second
coming, creating great companies, and setting the
stage for an explosive future.”
––Colin Anawaty, Co-Founder at Patient IO

Intro
Bangalore, India’s third most populous city, has emerged as
the startup capital of India. The city is home to approximately
3,100 to 4,900 active tech startups and has achieved the second
highest growth rate for exit volume and VC investment among
the top 20. As a result, Bangalore moved up four positions to
#15 in 2015, advancing from #19 in the 2012 ranking.
Most notably, Bangalore’s venture capital investments in 2014
amounted to approximately $2.25 billion, growing 4x to land at
#7 among the top 20.
Performance
Funding
10
6
Market Reach
20
Talent
17
Startup Experience
12
Growth Index
4.9
Bangalore 15
India
The ecosystem, which has historically been known as ‘the
world’s back office’, has transformed itself into a high-octane
environment that offers early-stage startups the opportunity to
turn into billion dollar companies. Recent success stories such as
Flipkart and InMobi are part of the unicorn club with valuations
beyond $1 billion. Their success helps inject wealth and expertise
into the ecosystem. This in turn increases the attention of the
international investor community, who are eager to find high
potential startups.
Bangalore has a solid pipeline of cost-efficient Talent, ranking
#17. Our data shows that Bangalore-based startups benefit
from the second lowest time to hire, and software engineering
salaries that are below $25,000 annually. However, the analysis
also suggests the average quality of the local talent is not yet on
par with the elite startup ecosystems around the world.
Ecosystem Partners: Microsoft Ventures and TLabs

Bangalore 103
﻿
Selected Findings
Bangalore has approximately 3,100 to 4,900 active
startups, making it the largest ecosystem in India.
Its #6 ranking in Funding results from a 4x growth
in VC investments, the fastest pace of VC growth
among the top 20.
Average seed funding amount is low (27% below
APAC1 average) while Series A investments are
slightly above APAC average.
Ranking #17 in Talent, Bangalore ranks among
the lowest in quality, but with a dramatic cost
advantage (~$25,000 vs. ~$120,000 in Silicon
Valley).
It ranks #12 in Startup Experience. Compared to
Silicon Valley, the ratio of employees with previous
startup experience is 18% lower while the number
of advisors with equity is less than half.
Bangalore-based startups give 7% equity to
employees - 30% lower than regional average.
With a median age of 28.5 years, Bangalore is
home to the youngest entrepreneurs in the region
(14% below regional and 27% below Silicon Valley
average).
1 Not including China, South Korea and Japan
“I believe Bangalore is easily the best place to
startup in India right now. There is easy access to
capital and a relative abundance of talented youth
who are passionate about working for startups.
More importantly, being in India puts us at the heart
of a very large market where the demand for new
solutions is growing faster than anywhere else in the
world. In addition, there are two more advantages
that nicely compliment the large market - 1. You can
prototype new solutions, both technology driven and
otherwise, even with an extremely low budget. This
allows you to experiment rapidly and perfect your
solution without losing too much time or money
before scaling up. 2. The Indian market is so large,
diverse and complex that if you can make a solution
work reliably across India, you can make it work
anywhere else in the world. And oh, Bangalore also
has the best weather among all the big cities in
India. Trust me, it counts for more than you think.”
––Amruth BR
“What makes Bangalore so special is the people
here. The locals form just 30% of the population and
are very friendly and hospitable and the immigrants
add to the culture fusion. Bangalore has always
been the Science and Technology capital, including
Space and Avionics. It is also home to the largest
number of engineering colleges (within city limits) in
the world - so the availability of quality talent with
an innovation mindset has made Bangalore an
ideal environment for starting up. Also large sets of
returning Silicon Valley-experienced Indians choose
Bangalore, which adds to the availability of an
internationally experienced talent pool. Almost all of
the Indian VCs have an office here. Average cost of
living in Bangalore is definitely cheaper than Delhi/
NCR or Mumbai and people just love the Bangalore
weather!”
––Chandan Raj, COO at YourStory

Intro
Sydney is home to 1,500 to 2,300 active tech startups and half
of Australia’s 500 largest companies. Due to its position as the
second lowest on the Growth Index within the top 20, and its
comparably weak statistics around Performance, Funding, and
Market, Sydney now ranks #16 (down from #12 in 2012). Still, the
ecosystem is clearly capable of producing dominant startups,
as Atlassian, Campaign Monitor, and recently Freelancer.com
demonstrate. Cumulatively, these three startups already add up
to a market capitalization of around $3.5 billion.
Around two-thirds of Australia’s startup activity takes place in
Sydney, and almost half of all employees have prior experience
in a startup (only 4% below SIlicon Valley).1
Performance
20
Funding
16
Market Reach
17
Talent
Startup Experience
Growth Index
6
10
1.1
Sydney 16
Despite the relatively high cost of software engineers in Sydney
(around $88,500), the quality and availability of tech-savvy
talent helped Sydney rank #6 in Talent overall. Stakeholders in
the ecosystem highlighted that Sydney’s popularity inside and
outside the country helps the ecosystem access young, capable,
and diverse talent.
Sydney still faces challenges in Market Reach (#17) and Funding
(#16). The availability of later-stage venture capital is a key
bottleneck, a dynamic that can be attributed to the traditionally
risk-averse Australian investment culture. Despite a rising inflow
of U.S. capital, this lack of funding currently hurts Sydney’s growth
and its Performance Index (#20). A recent report by StartupAUS
makes a strong plea for government interventions - similar to
the successful measures taken by governments in the United
Kingdom, Israel, and Singapore, which among other things, could
help solve the sub-optimal funding environment2.
Ecosystem Partners: Pollenizer and Deloitte, Australia
1 PricewaterhouseCoopers. (2013)
2 Turner, A. (2015)

Sydney 108
﻿
Select Findings
Sydney’s Startup Experience ranks #10, thanks
to advisors with equity and founders with
hypergrowth experience at 21% and 30% higher
than the APAC average, respectively.
Average seed investments are by far the highest
in APAC, while average Series A amounts are 42%
lower than the regional average.
Sydney has the highest engineer salaries in the
region, 50% above regional average, but still 33%
lower than Silicon Valley.
It ranks #17 in Market Reach, with a relatively small
local market, and comes in at 11th place in Global
Market Reach, thanks to an average of 40% foreign
customers (almost equal to the regional average).
Equity shared with employees is 20% higher than
in Silicon Valley and 18% above regional average,
reflecting the open and collaborative nature of
local entrepreneurs.
“The Sydney ecosystem is now vast. There are
thousands of people making great startups with
evidence that we can make global businesses. As the
city grows we struggle with a very high cost of living
which drives up the cost of talent and generally
makes it harder for people to commit to sustained
periods in a new venture.”
––Phil Morle, CEO at Pollenizer
“Australia has a great trajectory of organic growth
of our Australian Ecosystem with companies like
Seek and REA worth more than a billion dollars.
However we’re lacking government packages to
accelerate maturation, which have already been
implemented by other similar countries such as
New Zealand, the UK and Canada. There’s serious
competition for Australia’s best and brightest
entrepreneurs and as noted recently by Australia’s
Chief Scientist, Professor Ian Chubb, Australia is one
of only three countries in theOECD without a science
or innovation strategy.”
––Peter Bradd, CEO and Founding Director at StartupAUS
“Sydney-based entrepreneurs have great access
to early-stage deal flow opportunities whereas Series
A rounds represent a real challenge. Here many
startups face higher fund raising cliff risk. U.S. VC
houses have become increasingly active in our
market but only starting at the Series B $10 million
investment level.”
––Joshua Tanchel, Partner at Deloitte Private

Sydney 111
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
15%
Silicon Valley
APAC Avg
23% 58%
20% 38%
National government rated positive
18%
Silicon V
APAC Avg
11%
19%
-39%
10%
Immigration time
99
Silicon Valley
21 -79%
APAC Avg.
79
-21%
Top Policy Issues
Cost & availability of workspace
Attractiveness of ecosystem to foreign investors
“In the global tech arena, Sydney continues to punch above its weight but
below its potential. In the past year another set of companies shot past $100
millions in value but still too many early stage entrepreneurs are lamenting
the lack of venture capital rather than wearing out shoe leather in the big
markets of China, USA or Europe, or even South East Asia - which is right
on our doorstep. Our domestic market is just too small. On the plus side,
some groups are building stronger bridges to those larger markets and
some speciality is growing in education, health, marketplaces and business
software. 2016 is going to be a huge year for Sydney.”
––Mick Liubinskas, Entrepreneur in Residence at muru-D and Co-Founder at Pollenizer
Transportation infrastructure
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Toronto is the most populous and economically powerful city in
Canada. It is home to the world’s seventh largest stock exchange,
and is a vibrant hub for innovation and entrepreneurship. Despite
Toronto’s significant drop of nine spots in the overall ranking
(#17 in 2015 from #8 in 2012), the ecosystem has grown over
the past three years and now comprises between 2,500 to 4,100
active tech startups. As with all other ecosystems that slid in the
ranking (with the exception of Tel Aviv). This drop in position
owes to Toronto’s relatively slower growth (5th slowest of the
top 20) rather than erosion. Toronto still maintains its position as
the strongest startup ecosystem in Canada.
Performance
14
Funding
18
Market Reach
14
Talent
15
Startup Experience
18
Growth Index
1.3
Toronto 17
Canada
It is competitive in Market Reach (ranked #14) and Talent
(#15) with a skilled and low cost talent pool, even without
taking into account the government’s R&D tax credit. Toronto
is also a culturally diverse city, as reflected in the international
composition of startup teams (48% of foreign employees). As the
CEO of Toronto’s poster child startup Wattpad (a member of
the Canadian ‘Narwhal Club’ with a valuation beyond $1 billion)1
stated, the company’s international expansion plans were largely
centered around the diverse and multilingual talent pool of
Toronto.
To ensure the city’s competitiveness on a global level, Toronto
has to improve local access to venture capital (ranked #18).
Most experts agree that access to seed and Series A funding
are less of a concern as established angel communities exist
and government programs supported the development of
institutional investment firms. However, startups have been
strongly dependent on U.S. VC firms for later-stage investments.
A growing number of startups have been able to secure laterstage funding, sometimes with local venture capitalists taking
the lead, yet the structural gap around series B funding persists.
1 Orton, T. (2014)

Toronto 113
﻿
Selected Findings
Toronto ranked higher than Vancouver and
Montreal in the Performance Index with higher
Startup Output and Ecosystem Value, and in
Market Reach, due to its larger local market.
Toronto startups reports an average of 48%
foreign customers, about 20% lower than for
Montreal and Vancouver.
Software engineers in Toronto receive around half
of the salary of their peers in Silicon Valley
(~$55,000 vs. ~$120,000).
Only 5% of startups benefit from having a founder
with experience in a hypergrowth startup (69%
below regional average and 85% below Silicon
Valley average).
The second weakest point of the Toronto ecosystem is the low
Startup Experience (#18), where Toronto ranked lower than its
Canadian counterparts.
Ecosystem Partner: Startup Canada
been increases in the number of start-ups seeking
funding. Maple Leaf Angels, a Toronto-based angel
group, has seen a doubling of applicants for funding
in FY 2014 versus 2013.”
––Gerard Buckley, President and CEO at Jaguar Capital
“Across the entire world, Toronto is a unique
gem of a city. It brings the entire world together
in one place. It is geographically in the American
market, historically in the European market, and
its rapidly changing population is building new ties
to Asia. It has world leading universities, top talent,
an incredible media landscape, huge government
entrepreneurship grants and private capital. Toronto
has world leading companies in nearly every vertical,
all in one city. And as a culture, Toronto prides itself
on integrating and celebrating diverse peoples.”
––Sunir Shah, VP Marketing Olark
“There are 3.7 million high-net-worth individuals
in North America with only about 320,000 of those
with more than $1 million in investable assets in
Canada. There should be no surprise to readers that
there is a funding gap. Canadians are conservative
investors by nature and the 2014 NACO Report
shows a decrease of angel investors from 2100 in
2013 to 1700 in 2014. In spite of this, there have
“Toronto is a 24-hour metropolis that draws the
best and brightest, not just from across Canada,
but from around the world. Talent is just as good
as what can be found in the U.S., but with overall
prices more affordable than Silicon Valley. With our
world renowned social safety net, I just wish that we
took bigger risks. Only then will we approach Silicon
Valley’s ranks.”
––Connor Dickie, Co-Founder and CEO at Synbiota

Toronto 116
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
30%
23%
Silicon Valley
North America Avg
-23%
28% -6%
National government rated positive
27%
Silicon V.
11% -60%
N. A. Avg
25% -6%
Immigration time
71
Silicon Valley
21 -71%
N. America Avg
22.8
-68%
Top Policy Issues
Cost & availability of workspace
Cost of living
“Toronto is a world-class city in every way possible with a strong and
expanding startup ecosystem. Three critical factors are holding us back from
breaking through to the top level. First, it’s our Canadian-ness. We wear an
albatross of modesty that you don’t see in the Silicon Valleys and Tel Avivs of
the world. We can sometimes be too meek and apologetic to clearly convey
our desire for top-level success. The second is that the investment community
simply isn’t where it needs to be. Too many Toronto entrepreneurs seek earlystage venture funding from the U.S. and internationally out of necessity rather
than choice. Finally, while the greater Toronto area has 6 million people, our
startup community has yet to shed what can often be a restrictive small-town
mentality.”
––Aron Solomon, Aron Solomon, JD, Senior Advisor and Founder at LegalX
Attractiveness of ecosystem to foreign investors
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Vancouver is the largest city on the West Coast of Canada and
shares many cultural similarities with Seattle and San Francisco, its
American counterparts. Originally fueled by the forestry, mining,
and shipping industries, its economy is now fueled by software
development, biotechnology, aerospace, and entertainment.
Vancouver is currently home to between 1,600 and 2,700 active
tech startups and ranks #18, compared to #9 in 2012. This is
explained by its relatively slow growth (the third lowest Growth
Index of the top 20), and an update in our methodology away
from the number of startups per capita.
Recent success stories include HootSuite and Avigilon, which
together created more than 1,000 jobs and became part of the
Canadian ‘Narwhal Club’ for startups with valuations beyond $1
billion. Hyper-growth tech startup Slack opened a sizable office
in Vancouver, taking advantage of Canadian immigration policies
while being in the same time zone as San Francisco.
Performance
18
Funding
19
Market Reach
15
Talent
14
Startup Experience
11
Growth Index
1.2
Vancouver 18
Canada
Funding is Vancouver’s big bottleneck, with a #19 rank. 2014
venture capital investments were around $382 million, an
amount of capital far below other leading startup ecosystems.
However, its access to skilled software engineers is quite
good—it ranks #14 in Talent due to its lower talent cost, even
without considering the impact of Canada’s R&D tax credits. Still,
entrepreneurs complain that the city has become expensive and
that attracting high-quality talent in a timely fashion is a challenge.
Ecosystem Partner: Startup Weekend Vancouver

Vancouver 118
﻿
Selected Findings
Average seed and Series A funding amounts in
Vancouver are around 50% lower than the North
American average. The percentage of local-only
investments is slightly higher.
Vancouver achieves an excellent #11 ranking in
Startup Experience thanks to the high average
number of advisors with equity (1.54, which is 11%
above North American average).
The time to hire a software engineer is 9% longer
than in Silicon Valley, but the cost of engineers is
less than half (~$52,000 vs. ~$120,000).
While ranking #15 in Market Reach, Vancouver
achieves an impressive #2 in Global Market Reach.
Like its Canadian counterparts, Vancouver startups
focus on the U.S. market from an early stage, as
captured by an average of 60% foreign customers
(North American average: 37%) and an average
number of 1.8 product languages.
Very few founders (7%) have gained experience at
hypergrowth startups (35% in Silicon Valley).
“Vancouver has grown into an incredible location
for startups across a wide variety of industries.
With excellent support from the C100, VC firms
like VersionOne Ventures, and incubators and
accelerators like Launch Academy and Highline,
startups have never been in a better position to
launch their businesses in Vancouver. In order
to truly evolve into a world class startup hub,
Vancouver continues to need broader access to
quality angel investors and professional capital,
with extensive experience in scaling businesses.
Too many amazing Vancouver companies sell or
otherwise exit prior to successfully raising a Series
B or C round. We need more entrepreneurs willing
to follow in the bold footsteps of companies like
Hootsuite, BuildDirect, Avigilon that are building $1
Billion companies right here in Vancouver. As more
startups achieve scale in our own backyard, the
knowledge, experience and capital required to fuel
the local startup scene will continue to expand.”
––Rob Goehring, CEO at RewardStream
“With Canadian cities being geographically far
from each, combined with a much lower population
Startup Density compared to the United States,
Vancouver startups need to focus on growing
and expanding south of the border, as well as
internationally, to survive.”
––Charlene Tessier, CFO at Dana.io
“Vancouver’s tech scene is a growing and
undiscovered market with emerging talent that is
on par with major US tech hubs. People are slowly
starting to discover startups with roots in Vancouver
such as Slack, Hootsuite, Clio and PlentyOfFish.
Surrounded by water and mountains with an
emphasis on lifestyle and health this picturesque city
will continue its tech boom and attract interest from
VCs and techies alike for many years to come.”
––Milun Tesovic, Founder of MetroLycris.com

Vancouver 121
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
66%
23%
Silicon Valley
North America Avg
-65%
28% -57%
National government rated positive
68%
Silicon V.
11% -84%
N. A. Avg
25% -63%
Immigration time
71
Silicon Valley
21 -71%
N. America Avg
22.8
-68%
Top Policy Issues
Cost & availability of workspace
“With conferences like TED, TractionConf.io, and GrowConf hosted in
Vancouver, there is no doubt that the world is anticipating a startup boom in
this city. We have the talent, entrepreneurial mindset and the infrastructure to
support high growth startups to compete on the global stage. More and more
high quality startups will come out of Vancouver which will in turn attract
more capital flowing into this city. The ecosystem is poised for big and rapid
growth.”
––Ray Walia, CEO at Launch Academy
Formation and training of software engineers
Attractiveness of ecosystem to foreign investors
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Amsterdam-StartupDelta, the only European newcomer, enters
the ranking at #19 with more than 1,900-2,600 tech startups and
the 5th highest Growth Index of the top 20. It is geographically
defined by the Amsterdam-The Hague-Eindhoven triangle.
Amsterdam is an attractive location for tech startup founders due
to its unique lifestyle aesthetic and great startup infrastructure,
and while it’s not as big of a startup ecosystem as more prominent
European counterparts like London or Berlin, it certainly has the
ambitions to become like them.
The Ecosystem’s success stories include Startupbootcamp, a
global accelerator program now operating in more than ten
countries, Nimbuzz, and the first Dutch tech unicorn, Ayden.
Hypergrowth startups such as Uber established their European
headquarters in Amsterdam and use it as the gateway to
continental Europe.
Performance
15
Funding
20
Market Reach
10
Talent
18
Startup Experience
16
Growth Index
3
Amsterdam 19
Netherlands
To further enhance the ecosystem’s global impact, the Dutch
government recently launched StartupDelta, which is trying to
unite and better allocate the startup resources of the Netherlands
that are currently scattered across the country.
Despite these promising developments, there is a long way to go.
Amsterdam ranks last among top 20 in Funding. The lack of seed
and growth capital impedes entrepreneurial success, especially
with regards to later-stage startups.
Due to the small size of the Dutch market, Amsterdam startups
tend to think global from day 1, which explains an impressive #10
ranking in Market Reach. On average 50% of their customers are
foreign and they offer their product in more than two languages
from the outset.
1

Amsterdam 123
﻿
Selected Findings
Amsterdam is Europe’s 3rd fastest growing
ecosystem behind Berlin and London.
The average seed round amount is 21% below the
European average.
Talent quality is around regional average, however
the proportion of engineers with prior experience
is lower. 35% of all employees are foreigners, 15%
above European average.
Nearly 1/5 of all founders have worked for a
hypergrowth startup, 29% more than European
average.
Finally, the historical tendency for entrepreneurs in Amsterdam
to relocate to other cities when their startup is ready to scale may
partly explain the noticeable gap of experienced serial founders
and mentors in Amsterdam (#16 in Startup Experience).
Ecosystem Partners: Startup Foundation, StartupDelta, and
Dealroom
“Amsterdam: There is money, there is vision, there
are ideas, unfortunately not necessarily working
together.”
––Hans Koning, Managing Director at Biting Lynx
“I just founded my third startup in Amsterdam but
previously lived in Silicon Valley. And even though
the two make a nice comparison, the Dutch culture
is fundamentally different from what I’ve seen in the
Silicon Valley. But to herald Dutch innovation as it
currently stands is to unveil a project that’s still in its
most nascent state. It’s particularly exciting because
for a few years Amsterdam has been playing catch
up at a rate similar to Tesla’s upgrades to their
Model S’s speed. For one, the Dutch, on the whole,
speak better English than probably any non-native
population in continental Europe. And with an
excellent educational system in especially Math
and Science, the pool of tech talent is growing
rapidly. While most people think of Amsterdam as
the World’s capital of red lights, cheese, drugs and
tulips, very little know that entrepreneurship - in its
most fundamental form - actually originates from
the Netherlands. Second, our biking climate and
affordable office space and housing are particularly
interesting to more founders. Third, consider that the
Netherlands has 17 million people crammed into
an area half the size of South Carolina. Thus, with
more startups raising venture rounds north of a few
million, the infectious nature of Amsterdam’s capital,
can only become a profound breeding ground to
more prominent and talented startups from across
the globe.”
––Steven Lammertink, Founder and CEO at Cirqle

Amsterdam 126
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
27%
Silicon Valley
Europe Avg
-13%
23%
24% -11%
National government rated positive
15%
Silicon V
Europe Avg
11% -28%
20% 33%
Immigration time
80
Silicon Valley
21 -754%
Europe Avg.
81 2%
81
Top Policy Issues
Attractiveness of ecosystem to foreign investors
Cost & availability of workspace
“Amsterdam is trying hard to put itself on the map as an innovation hub
alongside London, Berlin and Silicon Valley. It is one of the few places where
people actually want to live and can afford to, even on a startup budget.
That is one of the reasons it has a large labor pool, which is important when
starting a business. Walking around the streets of Amsterdam and talking to
many of the entrepreneurs you will notice the city has a lot of the ingredients
to be a European startup hub. I, however, believe that the access to capital will
be the biggest challenge for Amsterdam. It is the only way to retain the talent
it’s producing.”
––David Wyler, Co-Founder and COO at Humin
Cost of living
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Montreal makes its first appearance in this year’s Startup
Ecosystem Ranking at #20. With its cultural diversity and high
quality of life, Montreal has proven to be a fertile ground for
entrepreneurs and innovative tech startups. Our analysis
suggests that Montreal is home to around 1,800 to 2,600 active
tech startups.
From its early successes with large exits in the animation industry
in the mid-90s, Montreal has grown into a top 20 startup
ecosystem with a good balance across the key indexes we
measure startup ecosystems on. On the Funding side it ranks #17,
having complemented its good institutional investor community
with a number of well-organized, active angel investor groups
such as Anges Quebec. However, as with the rest of Canada,
startups here still find themselves needing to cross the border
to secure later-stage capital.
Performance
19
Funding
17
Market Reach
16
Talent
13
Startup Experience
17
Growth Index
1.5
Montreal 20
Canada
Montreal enjoys good access to skilled software engineers and
ranks #13 in Talent, thanks to the attractiveness of the city,
combined with four well-known engineering schools that annually
educate more than 5,000 computer science graduates. It also
offers significant cost advantages; it has the lowest engineering
salaries among North America’s top 20, and additionally benefits
from Canada’s generous R&D tax credits of up to 70%. This
combination of quality and low cost talent explains why several
larger tech companies, such as Silicon Valley’s Electronic Arts and
France’s Ubisoft, have chosen to open large software development
offices in Montreal. While those are large companies, it builds
the tech-savviness of the ecosystem and many of the employees
go on to found or work at startups.

Montreal 128
﻿
Selected Findings
Despite an above-average growth in the number
of startups, Montreal’s growth index ranks 14th
due to the relatively slower growth of exits and VC
investments.
Montreal ranks #17 in Startup Experience, with a
much lower proportion of employees with startup
experience, advisors with equity, and founders
with hypergrowth experience.
Series A round amounts are 11% higher than
the top 20 North American hubs, while seed
investment are 39% lower.
Montreal has the cheapest tech talent of top 20
North Americans hubs (46% below average) and
44% of startup employees are foreigners (27%
above the North American average).
#3 in Global Market Reach, Montreal’s startups
have a proportion of foreign customers of 57%
(35% above North American average) and an
average number of product languages of 2.4
(24% above the North American average).
However, there are a few areas where Montreal’s startup
community seriously lags behind the top U.S. and European
hubs, namely its ability to support rapidly scaling companies and
its lack of large exits which are needed to energize the ecosystem.
Improved global sales, marketing, and business development
skills are also prerequisites needed to fulfil these goals.
Ecosystem Partner: International Startup Festival
“Historically, Montreal was a strategic city. It’s an
island, poised like a blockade on the St. Lawrence
River, and for centuries it controlled trade from
the Great Lakes to Europe. But history passed it by
with the advent of global shipping and air travel. It
has a few tech titans: CGI, Bombardier Aerospace.
And it has always had a creative side: the software
for Jurassic Park came from here and Cirque du
Soleil blends athleticism with tech. Until recently, it
hadn’t found its feet. Risk-averse Canadian investors,
concerns about linguistic regulation, and a tendency
to think locally and constrain aspirations had
plagued the ecosystem. In the past five years, this
has changed. The discipline of entrepreneurship—
codified by Steve Blank, Eric Ries, and their
disciples—has laid out a clear path to launching
new ventures. Pre-accelerators like Startup Weekend,
Up Global, and Founder Institute have minted a new
generation of founders. A number of respectable
mid-sized exits have peppered the landscape with
Angels, mentors, and returning founders. Real
Ventures’ FounderFuel accelerator and Notman
House workspace have given the city a center of
gravity. And the International Startup Festival, now
in its sold-out fifth year, is the closest thing Canada
has to Websummit. The city is finally remembering
how much it has to offer: a blend of art and science;
a gateway to Europe; access to a pool of smart,
loyal, multilingual talent; and favourable economic
incentives. And with this memory is a flourish of new
ideas, new risks, and ultimately, world-class startups
ready to bloom.”
––Alistair Croll, Founder at Solve For Interesting
“Montreal has made incredible strides over the
last few years. We have an extremely tight and
cohesive startup ecosystem, with tremendous
community and government support. Beyond being
a great city to start a business in, Montreal is a
fabulous place to live and play.”
––Philippe Telio, Founder at The International Startup Festival

Montreal 131
﻿
Supporter & Policy Maker Insights
1
Local government rated positive
33%
23%
Silicon Valley
North America Avg
-30%
28% -15%
National government rated positive
37%
Silicon V.
11% -71%
N. A. Avg
25% -31%
Immigration time
71
Silicon Valley
21 -71%
N. America Avg
22.8
-68%
Top Policy Issues
Attractiveness of ecosystem to foreign investors
Taxes
Local regulations (permits. licenses. etc.)
“When you visited Montreal 5-10 years ago it was hard not to notice the
city’s glorious past - the cobbled streets, the stone mansions and the converted
warehouses. But you had the sense that it might be a city that had almost lost
touch with its history of entrepreneurship. But the collaborative mindset that
had been instrumental in the world’s most successful startup hub(s) perfectly
suited the naturally informal, creative psyche of Montrealers. Benefiting from
this, a small, close-knit startup community was able to leverage this mindset
to build a thriving startup scene that now has the scale and startup density of
talent and capital to produce companies capable of being leaders on a global
scale. While the city shows massive promise, it hasn’t yet quite proven its
sustainability as a startup hub. More of the current crop of promising startups
need to realize their potential - and a few ‘acorns’ will then need to drop from
those companies, either as investors or entrepreneurs, and themselves go
on to be successful. The table is set, the potatoes are chopped, the gravy is
bubbling and the squeaky cheese is on the side, but the poutine isn’t quite
ready for eating yet. “
––John Stokes, Partner at Real Ventures
1 % Delta to Regional Average, % Delta to Silicon Valley
Compass.co

Intro
Hong Kong’s startup community has grown rapidly in the last
two years, with an estimated number of some 2,000 early- to
late-stage tech startups. It now solidly ranks among the top 25
startup ecosystems in the world, with a Market Reach score that
would rank among the top 10 due to its proximity to the Chinese
Mainland with its large market, history of open markets, and
deep international trading expertise. This makes Hong Kong an
attractive launchpad for startups to scale globally.
Despite its more than healthy growth, Hong Kong’s
startup ecosystem is still at an early stage of development.
Entrepreneurship is becoming more popular among the younger
generation but the culture still dampens risk-taking in general.
This also makes recruiting local talent more difficult.
Performance
25
Funding
30
Market Reach
(10)
Talent
(10)
Startup Experience
(20)
Growth Index
Feature:
3.0
Hong Kong 23
On the Funding front the city is still lagging behind despite the
high number of high-net-worth individuals and deep-pocketed
financial institutions. As with many other developing ecosystems
the small number of sizeable tech exits has produced relatively
few angel and venture investors experienced in, or comfortable
with, tech startups. While the growth in exits is improving the
situation, more is needed to close Hong Kong’s Funding and
Startup Experience gaps.
Building on its traditional strengths as a supply chain management
hub, Hong Kong has strong potential in the development of
startups that combine hardware and software such as wearables
and Internet of Things. The proximity to Shenzhen adds to this
potential by providing easy access to inexpensive and rapid
prototyping. Fintech is another promising growth area, given
Hong Kong’s long-held position as one of the major international
financial centers.
Ecosystem Partners: InnoFoco and University of Hong Kong

Hong Kong 133
﻿
Selected Findings
Performance
• Rapid growth in the number of startups, thanks to growing
entrepreneurship (organic growth) and the attraction of
some international entrepreneurs (inorganic growth). The
number of co-working spaces has mushroomed in recent
years.
Funding
• Significantly lower access to venture investments than in top
20 ecosystems.
• No shortage of capital but high-net worth individuals
favor traditional investments with few of them having tech
experience, even though their interest is rising.
• Outlook: a continued increase in the quantity/quality
of startups and successful exits could rapidly turn the
abundance of local capital and financial institutions into a
venture funding strength.
Talent
• Despite world class universities, attracting high-quality
technical talent is challenging for startups due to the riskaverse culture and the competition of large companies.
Market Reach
• Long tradition of international trade and the presence
of expats and western-educated locals translate into an
excellent, demonstrated ability to penetrate foreign markets.
• Proximity to Mainland China market and convenient access
to other Asian markets.
Policy
• Recognition of the importance of startups by the government
(notably InvestHK) stepping up marketing of Hong Kong as a
startup hub.
• New initiatives to promote startups from universities
and institutions like Cyberport, Hong Kong Science and
Technology Parks.
• Can be more proactive in adapting government policies
and regulations to facilitate the development of the startup
ecosystem.
“To realise its full potential as a startup hub,
Hong Kong should further develop its position as an
integrator and packager of ideas, talents and capital
from around the world.”
––Rachel Chan, Founder and Chief Catalyst at InnoFoco
“Startups are an important component of the
disruptive innovation process that is redefining
the global economic, social and political order.
Historically, Hong Kong has always been very
successful in capturing business opportunities by
integrating and harnessing the talents and resources
in the region and around the world, especially in
manufacturing, trading and services. We have now
arrived at a stage when Hong Kong will perform this
role in innovation”
––Prof Richard Wong of the University of Hong Kong
Hong Kong’s data will be published in the upcoming Hong Kong
Startup Ecosystem Report.

Intro
With its entrepreneurial spirit, advantageous location in the
middle of Southeast Asia, and high English proficiency, Kuala
Lumpur is well-positioned to claim a spot among the top Asian
startup ecosystems. It is one of the fastest growing ecosystems
in the world, with a Growth Index of 4.0.
For several years, its government has actively invested in the
development and success of startups, namely with the creation of
MaGIC, a startup hub whose objectives are to develop, educate,
expose, and accelerate entrepreneurs. With an impressive
growth in successful exits, Kuala Lumpur is experiencing the rise
of a new generation of Malaysian tech entrepreneurs. Although
weaknesses of the ecosystem still exist, access to funding and
talent has improved thanks to responsive government policy.
Finally, despite Malaysia’s smaller economy, its central location
near larger Southeast Asian markets makes it a good platform
for international growth.
Ecosystem Partners: MaGIC (Malaysian Global Innovation
& Creativity Centre), MDeC (Multimedia Development
Corporation) and AIM (Agensi Inovasi Malaysia)
Feature:
Kuala Lumpur
Malaysia

Kuala Lumpur 135
﻿
Selected Findings
Rapid growth in the total value of exits and in the
number of startups, due government support.
Much lower access to Series A and later-stage
capital than in top 20 ecosystems.
Government funding has been instrumental in
closing the angel funding gap. While there is
no lack of high-net worth individuals, few have
experience with tech investments and/or the risk
appetite for them.
Local technical talent, favors more stable jobs. This
has led startups to turn to foreign talent, made
easier via special immigration regulations.
Kuala Lumpur startups can count on a modern
economy with very good infrastructure, but the low
availability of electronic forms of payments remain
a challenge.
Kuala Lumpur ranks low in ability to go global
despite its privileged location at the center of
Southeast Asia’s larger markets and the English
proficiency of the general population.
Policy: proactive policy-making from the national
government lead to easier hiring of foreign talent,
better ecosystem coordination (namely through
MaGIC) and improved early-stage funding.
“2014-2015 is a breakthrough year for
Malaysia in the tech startup space. We have seen
the introduction of seven new accelerators, each
with a different focus: gaming (GameFounders),
fintech (Maybank), iOT (Brinc), travel (Tune Labs),
MaGIC’s very own MAP early stage accelerator, and
500Startups’ Distro Dojo growth-stage accelerator.
Our startup darling GrabTaxi has raised $530
million from VCs (and is well-positioned to become
the dominant player in SEA. We believe Malaysia has
all the ingredients to be the best launchpad for any
Southeast Asian startup —from a track record of
successful regional founders, to its lower startup cost
as compared to Singapore and its multicultural and
multilingual advantage.”
––Cheryl Yeoh, MaGIC
“The ASEAN startup ecosystem is at a new stage of
maturity, with plenty of companies having already
gotten very far with their product and fundraising.
We want to equip local startups with world-class
tools, methods, and tactics. With MaGIC’s support,
world-class support for growth stage companies is
accessible right here in Malaysia.”
––Khailee Ng, 500 Startups
––“Malaysia is a good place to grow regional
businesses. It needs to believe in its strong offering
within the South East Asia ecosystem. From a
rules and regulations perspective, it is relatively
easy to employ foreign talent in Malaysia,
especially with the recent introduction of the MSC
Status that permits startups to hire up to 20
foreign employees without restriction.”
––Hugh Batley, Lion & Lion
“We have everything here. The environment is
good and business-friendly. Besides a multicultural
background, our English-speaking base is also an
added advantage. And we are doing our part to
draw in more private sector funding to increase the
capital pool available for startups. ”
––Jamaludin Bujang, MAVCAP

Feature: Ecosystem Canvas 139
Feature:
Ecosystem Canvas
By Dr. Thomas Funke
Why is there a need for an ecosystem
canvas?
As Head of the Entrepreneurship and Innovation department
at the German Productivity and Innovation Centre (RKW) - a
think tank of the Federal Ministry for Economics - I have spent
a lot of time analyzing startup ecosystems with community
builders around the world. In every single discussion, meeting,
or workshop on startup ecosystems, I realized one thing:
There needs to be a shared understanding of what an
ecosystem actually is. A concept that everybody understands.
One that facilitates description and discussion, and allows us to
start from the same point and talk about the same thing. The
challenge is that this concept must mple, relevant, and intuitively
understandable, and at the same time not oversimplifying the
complexities of how ecosystems function.
This is why we developed a canvas that prescribes the manifold
relationships of an entrepreneurship ecosystem. This canvas is
designed to act as the starting point of a new perspective for
both community builders and startups on their local ecosystem.
It enables them to exploit existing chances and at the same
time identify missing links. Both policy makers and startups
can use it to focus on operational as well as strategic plans for
supporting their local ecosystem. This concept can become a
shared language that allows you to easily describe and influence
ecosystems to create a better environment for startups.
What is the ecosystem canvas?
An ecosystem can best be described through eleven basic
building blocks that show the logic of how an ecosystem works.
The eleven blocks cover the four main areas of an ecosystem:
Ideas & Talents, Startup Community, Policy & Finance, and
Markets. The canvas is part of a methodology that helps you to
not forget relevant success factors when working on your local
ecosystem. The methodology has 4 steps: in the first layer, the
canvas serves as a reality check that reminds the key actors of
a local ecosystem to think holistically about their ecosystem,
connects them to each other, and prevents them from getting
stuck on their own program. In the second step, it serves as a
blueprint strategy for all actors in the network to be implemented
in the ecosystem through structures, processes and systems. In
the third step, it shows all community builders in a visual way,
both the big picture, their own (important) roles in it, and the
interdependencies. The fourth step helps to explore new growth
opportunities, assess uses of new support programs, and to
communicate across the community how we could accelerate
the development of the ecosystem.
This concept has been tested and successfully applied by various
public business agencies, universities, incubators, and startup
support organizations across the globe. Following the illustration
on the next page, we invite you to learn how we applied our
canvas on the example Berlin - one of the rising stars of this
year’s report.

Feature: Ecosystem Canvas 141
The Case of Berlin
1. Understanding the Context
One of the cases where we have applied the canvas to is the
vibrant startup scene of Berlin. The key reason why the German
capital is so successful is its attractiveness to talent from all
over the world. Also thanks to public actors and their support
programs for entrepreneurs, the ecosystem continues to
develop. However, certain concurrent activities inadvertently
harmed the development of the ecosystem. For example, due
to the government’s primary goal to fully exit from nuclear fossil
and fuel energy, many startup support programs were headed
in the same direction, namely increasing the startup activity
in the clean-tech sector. At least four of the bigger support
organizations claimed to be the leading support organization
for cleantech startups and launched initiatives to inspire and
support future cleantech startups. Every support organization
had similar offers for startups, yet there was no clear strategic
positioning among the support institutions. Startups didn’t know
which stakeholder stood for what kind of funding and support.
This lack of alignment caused not just an inefficient allocation of
capital and other resources but also lead to startups not utilizing
any of the support programs. Additionally, the funding and
support created a shortfall for other important areas, such as
life sciences or ICT. The most unfortunate part was that without
a holistic view on the interdependencies of all programs and its
actors, none of the actors were fully aware of the problem since
they were stuck in their own program details. This status quo
was an ideal context to apply the methodology of our ecosystem
canvas.
2. Mapping the Status Quo
The canvas served as ideal methodological approach, as one
cannot develop a system-solution before most of the relevant
stakeholders of the system have the same understanding of the
underlying problem. We applied the canvas and its underlying
methodology in a series of workshops that brought together
the key actors such as ministries, public agencies, and those
responsible for new support and funding programs. Working with
the canvas helped the stakeholders to bring their perspectives
to the meta-level. They were able to understand the missing
alignment of their initiatives and the problems this caused for the
entire ecosystem. Additionally, it helped the community builders,
especially the public agencies, to view themselves as an essential
part in their local ecosystem—not isolated, but connected to all
other actors in the ecosystem. With the help of the canvas, the
community builders were able to identify the interdependencies
of each other’s programs and establish externalized as-is and
to-be ecosystems.
3. Exploiting Untapped Potential
As can be seen from this example the canvas adds significant
value in almost every specific situation of community builders.
In the case of Berlin, many of the actors in the clean-tech sector
now actively collaborate, communicate systematically, and keep
each other on track about the development of their support
programs. They still work with the canvas visually to clearly see
the big picture and their own important roles in it, as well as
all interdependencies. They now complement and harmonize
most of their activities. Applying the canvas has lead to a clearer
positioning of all stakeholders on the market. One stakeholder is
now solely responsible for the education and qualification part,
another primarily concentrated on financing cleantech startups
and providing them with key infrastructure.Above all, the
canvas brought along high cost savings for the federal and city
government as aligning the programs led to less redundancies.
Furthermore, a clearer communication of individual program
benefits led to a strongly improved match making with eligible
startups.

Methodology 143
Methodology
The ranking methodology focuses on the following aspects:
• Interview of Experts: ~ 200 interviews across 25 countries
with founders, investors, and industry experts
• Stakeholder Objectives: informing our stakeholders’ strategic
decisions.
• 2015 Startup Ecosystem Survey with ~11,000 participants
in 40 ecosystems.
• Objectivity and Transparency: producing a data-driven,
objective ranking based on a transparent weighting formula
and factors.
• Compass.co: performance data on traffic from ~35,000
technology businesses.
• Data Sources: using multiple data sources to assess a large
sample of startups.
• Robustness and Stability: testing multiple formulas to
make sure the ranking is robust to different data selection
methods.
1. Stakeholder Objectives
We took three different perspectives when defining the objectives
of this report.
• An entrepreneur seeking a location for starting or expanding
a startup.
• An investor looking for funding gaps.
• A policy maker looking for high impact to quantify impact of
policies.
2. Data Sources
We have focused our efforts on collecting measurable and
verifiable information from startups and investors, local
ecosystem partners, and third-party sources. Here’s a
description of our main datasets:
• Compass’ proprietary data
• CrunchBase: global dataset on funding, office locations and
exits;
• Orb Intelligence: global dataset on startup location, type and
status;
• Dealroom: European dataset on funding, office location
funding flow;
• AngelList: list of startups by city;
• Local partners (accelerators, incubators, startup hubs,
investors): list of startups by city.
3. Definitions Used
Tech Startup. Steve Blank defines a startup as a “temporary
organization in search for a repeatable and scalable business
model”. We then define tech startups azround the usage of
the term in Silicon Valley: startups whose products are mostly
software-based. This includes web, mobile, and telecom
software, as well as eCommerce. We excluded hardware,
biotech, nanotech, and cleantech from our analysis. This
definition allows us to analyze a more homogenous set of
startups. In terms of size, our analysis is focused on startups
that have raised at least $10,000 USD in financing, and/or hired
at least one employee. This means very early startups are not
considered part of this analysis, although sometimes hard to
exclude, for instance when estimating the number of startups
in an ecosystem.
Startup Ecosystem. A metropolitan city or geographic area
with a shared pool of resources. We applied a 60-mile/100
km radius around the city center, then worked with our local
partners to refine the geographic boundaries, i.e. which smaller
city shall be in or out.
Selected Data Timeframes:
• 2014 - the most recent full year. For all variables except two
(see below) we used data for the latest available complete
year as it is the most recent representation of an ecosystem.
First quarter 2015 data was not consistently available across
variables and ecosystems, so it could not yet be used. We
consider that when the direction of change of a variable is
fairly stable, longer timeframes only result in looking further
into the past.
• Sum of 2013, 2014 and first quarter of 2015 - the last 9
quarters. When a variable is subject to large swings from
one year to the next yet the direction of change is stable
over longer time horizons, we used a longer timeframe to
better capture the status of an ecosystem. This was useful
for two variables. The first is exit value, the first component of
Ecosystem Value. The issue is best illustrated by the following
example: Berlin had two exits worth a combined $14 billion
in 2014. Its 2015 exit value may well turn out to be lower, yet
this would hardly be an indication that the Berlin ecosystem
suddenly started shrinking after a period of rapid growth.
Using a longer time horizon prevents this issue. The second
variable is the value of pre-exit startups, which is the other
component of Ecosystem Value. Because it is based on
funding events that do not necessarily happen every year,
a longer timeframe helps capture the latest funding event
for the great majority of active startups. Some inaccuracies
will inevitably remain, but while some active startups may
not have closed a round between 1/1/2013 and 3/31/2015,

Methodology 144
this potential under-estimation is offset by the fact that the
estimate also includes the funding events of startups that
have since failed, but are very difficult to reliably identify.
Again, no timeframe offers a perfect solution.
5. Ranking Methodology
The ranking is a weighted average of the following factor
rankings:
• Performance Index: 30%
• Factor Indexes:
• Funding: 25%
• Market Reach: 20%
• Talent: 15%
• Startup Experience: 10%
We calculated an ecosystem index value for each index, based
on the sub-factor and component variables detailed below. The
ecosystems were ranked under each factor, then multiplied by
index weights to establish the overall rank of each ecosystem.
The weights of the factors were determined through multiple
correlation analyses and modeling work based on linear
regression analyses, using factor indexes as independent
variables with the performance index as dependent variable.
We then varied the weights and scoring sensitivity for each subfactor and component variables to measure the fit of the model
as measured by the regression’s r-squared (0.87) and variables’
t-values. Finally, adding the actual Performance Index to the
ranking formula serves to include the influence of unobserved
factors on the performance of an ecosystem.
6. Changes from 2012
7. Index Details
Having access to a larger volume of data combined with the
development of a mathematical model with a high degree of
fit drove a few changes in this year’s ranking methodology. The
most significant change was the removal of the metric “Startup
Density” (number of startups per capita, a measure of density)
from the Performance Index. This changes the scoring formula
away from density to overall value and size of the ecosystem.
Performance Index
In interviews with many stakeholders (investors, entrepreneurs
and others) we concluded that there is an interest for larger
ecosystems supported by the availability of more resources.
The question was how to compare the performance of different
ecosystems. Is an ecosystem with $10 billion in value and 1,000
startups in a city with a metropolitan population of 5 million
(Startup Density of 0.2 startup per thousand people) better than
one with $15 billion in value and 1,500 startups in a city of 10
million people (0.15 startup per thousand people)? Our intuition,
validated by interviews, modeling and correlation between
different factors, showed that both higher absolute value and
higher number of startups are better, so we scored them
separately. Startup Density was neither correlated with other
performance variables nor drove the decisions of entrepreneurs
and investors. Therefore we chose to focus the Performance
Index on the value and size of the ecosystem. We are conducting
more research to allow for more nuanced relationship in future
versions.
This change is one reason why Tel Aviv, despite its continuous
and well above-average growth rate, and the Waterloo Region
in Canada with its very small population (slightly above half a
million), are ranked lower in our 2015 ranking.
The Performance Index is based on the Value of the Ecosystem,
made of the sum of all valuations of startups at exits and at funding
events (80%) and Startup Output, the number of startups (20%).
• The Ecosystem Value is based on an analysis of CrunchBase
and Dealroom exit and funding data complemented with
our own research, using CrunchBase’s and Orb Intelligence’s
product tags, status (whether the startup is active or not) and
location. On average, the exit value accounted for 44% of
Ecosystem Value.
• Startup Output, or number of startups, is estimated using
the mark-and-recapture model and several lists of startups
for each ecosystem. Interviews and datasets gave us a
wide number of inputs for the number of startups in each
ecosystem. The main issue was that some datasets (such
as Crunchbase and Dealroom) are more popular in some
areas and less in others, so they do not cover all ecosystems
uniformly. We used a statistical model made popular by
the field of ecology and used to estimate the population of
different wildlife species, called “Mark and Recapture”. In this
methodology, every dataset we obtained was considered as a
sample from the entire ecosystem, and the overlap between
the datasets allowed us to estimate the total size of the
ecosystem. The more datasets we added to the model, the
more the estimate became precise. This is reflected in our
results by a narrower Startup Output range. You can read
more about the methodology here.

Methodology 145
• With the help of Global Entrepreneurship Network (GEN)
and Global Entrepreneurship Research Network (GERN)
we obtained several lists of startups for each ecosystem
from CrunchBase, 2015 survey participants, Dealroom, and
Compass and GEN partners. In total we collected more than
130,000 unique domains and analyzed them with the help of
Orb Intelligence to confirm location, activity and status.
Factor Indexes
A) FUNDING:
Availability of venture capital as measured by the amount of VC
investments and the average time taken to raise a round.
• 2014 Total Venture Capital Investments (80%); and Time to
Raise a Financing Round (20%).
B) MARKET REACH:
Access to customers allowing the startup to scale rapidly, based
on its local and cultural markets, and its ability to scale globally to
markets with different languages and needs.
• Local and Cultural Market Sizes (60%) comprised of: Local
Market Size based on metropolitan city GDP (50%); Cultural
Market Size based on national GDP and a portion of the GDP
of countries speaking the same language (50%);
• Global Market Reach (40%) comprised of: Proportion of
Foreign Customers based on survey data (80%); Number of
Languages offered based on survey data (10%); Proportion of
Foreign Employees based on survey data (5%); Proportion of
Funding Rounds with International Investors based on survey
data (5%).
C) TALENT:
Quality, availability and cost of technical talent.
• Quality (80%) comprised of: 2012 Startup Ecosystem Report
Talent Index excluding the 2012 metric on proportion
of employees with prior experience in a startup (33.3%);
Proportion of Employees with Prior Experience in a Startup
based on survey data (33.3%); Coding Skills based on the
TopCoder country scores (33.3%);
• Availability (10%) comprised of: Time to Hire Engineers based
on survey data (66.7%), Immigration Success Rate based on
survey data (16.7%), Immigration Time based on survey data
(16.7%);
• Cost (10%) based on average engineer salaries from
Compass’ proprietary 2014-2015 startup salary survey, the
input from some of Compass’ 60+ local partners and in a few
instances mean salary data points from Glassdoor, Salary.
com, and PayScale.
D) Startup Experience:
Captures the degree of startup experience in an ecosystem
and the degree to which its startups espouse practices that are
known to positively impact a startup’s success factors based on
The Startup Genome Report series.
• Number of Startup Advisors with Equity based (25%);
Proportion of Employees with Prior Experience in a Startup
(25%); Proportion of Startups with Founders with Prior
Experience in a Hypergrowth Startup (25%); Proportion of
Startups Providing Stock Options to their Employees (25%),
all based on survey data.
8. Growth Index
In addition to ecosystem ranking, we provide a Growth Index for
each ecosystem based on average z-scores across the following
indicators, converted into a 10-point index.
• Annual growth in the number of startups (33%) estimated
based on CrunchBase data;
• 2013-2014 growth in VC investments (33%);
• Two-year moving average growth of the annual sum of exit
valuations (33%), i.e. (2014 + 2013 exit values) / (2013 + 2012
exit values)

Acknowledgment & Partners 151
A global project like the Startup Ecosystem Report can only be
realized with enormous efforts from both the project team and
external supporters. Several partners have invested significant
of resources into the project. Numerous advisors, founders,
investors, and industry experts have given us access to their
knowledge, networks, and time because they support our vision
and wanted to move their ecosystem and the whole startup
sector forward.
This section is meant to express our deep gratitude and
appreciation towards anyone who made a contribution to make
this project possible.
Authors
• Lucas Hengstenberg, Data Acquisition and Analysis
• Johannes Drixler, Data Acquisition and Analysis
• Florian Fischer, Data Acquisition and Analysis
• Cheyenne Richards, Editor
• Gio Marcus, Editor
• Philipp Solay, Design
• Diana Martinez, Design
Danny Holtschke, Project Manager @Compass
Dr. Ron Berman, Assistant Professor of Marketing at The
Wharton School
Max Marmer, Writer & Founder Emeritus @Compass
Project Team
• Dhaval Chadha, Editor and Analysis
• Marc Penzel, Editor and Analysis
• Florian Schulze, Data Acquisition and Partnership
Development Manager
Global Partners
• CrunchBase: Everyday investors, journalists, founders, and
the global business community turn to CrunchBase for
information on startups and the people behind them.
Academic Contributors
• Dealroom is a data-driven marketplace for private capital,
providing direct and secure access to the world’s most
sophisticated investors.
Dr. Thomas Funke, Head of Department for Entrepreneurship
of a think tank of the German Federal Ministry for Economics
• Global Entrepreneurship Network is a year-round platform
of programs and initiatives created by the communities
that celebrate Global Entrepreneurship Week each
November.
Bjoern Lasse Herrmann, CEO & Founder @Compass
JF Gauthier, CFO & Head of Business Development @Compass
Partners and
Collaborators
Survey Participants and
Interviewees
Thanks to the more than 11,000 survey participants and 200
interviewees--startup founders, investors, leaders of accelerators,
incubators and startup hubs, and policy makers--across who
trusted us by sharing their confidential information and expert
knowledge with us. By providing us with solid quantitative data,
they created the basis and the heart of our research.
Thank you for your support!
• Microsoft Ventures is a global initiative empowering
entrepreneurs around the world on their journey to build
great companies. We work with startups at every stage of
maturity to provide the tools, resources, knowledge and
expertise they need to succeed.
• Orb Intelligence: Business Information for B2B Marketing
and Sales. Orb provides company information and smart
algorithms as a service to marketing software vendors and
B2B agencies.
• Startupbootcamp is a global network of industry focused
startup accelerators. We take startups global by giving
them direct access to an international network of the most
relevant partners and investors.

Acknowledgment & Partners 152
Regional Report Partners
Hong Kong S.A.R.
Amsterdam-StartupDelta, Netherlands
We expect to publish regional reports over the coming months
in partnership or collaboration with the following organizations.
InnoFoco is working at the interface of the private, public and
nonprofit sectors, InnoFoco is a network of catalysts who aspire
to make a meaningful difference to the world, with expertise in
branding, design, and innovation.
StartupDelta tackles challenges that hinder the growth of
startups. It closely collaborates with the 10+ tech hubs to make
the Netherlands the largest startup ecosystem in Europe.
Australia
Deloitte is the brand under which thousands of professionals
collaborate across a network of offices in Australia to provide
audit, economics, financial advisory, human capital, tax and
technology services.
Pollenizer builds incubation and acceleration programs that
help entrepreneurs and big companies all over the world get
started with high growth, tech-powered businesses. We call this
“startup science”.
Belgium
iMinds inspires and trains people to turn their innovative
ideas into successful businesses. iMinds’ Incubation &
Entrepreneurship programs connect (future) entrepreneurs
and researchers.
The University of Hong Kong (HKU) is the oldest institute
of higher learning in Hong Kong and also an internationally
recognized, research led, comprehensive university. HKU
strives to attract and nurture outstanding scholars from around
the world through excellence and innovation in teaching and
learning, research and knowledge exchange, contributing
to the advancement of society and the development of
leaders through a global presence, regional significance and
engagement with the rest of China.
India, Chennai
MaxBlox is the provider of a Platform-as-a-Service (PaaS)
enabling startups and independent software vendors to build,
deliver, market and sell their ideas to the world.
The Startup Foundation is an independent non-profit, run by
entrepreneurs, for entrepreneurs. They support founders in
building more successful startups.
Atlanta, USA
Fueled by the same entrepreneurial spirit that drives the folks
we cover, Hypepotamus generates awareness about Atlanta’s
innovative tech & creative community to retain local talent by
connecting them with opportunities.
Austin, USA
Techstars: see “Multiple Ecosystems” above
Local Ecosystem Partners
Central Texas Angel Network is committed to provide
startup capital and business mentorship in order to increase
companies likelihood of success to the maximum extent
possible.
Communitech is an industry-led innovation centre in the
Waterloo Region that supports a community of nearly 1,000
technology companies at all stages of development—from
startups to high-growth mid-size companies and large global
enterprises.
Multiple Ecosystems
Bangalore and Delhi, India
Built In is a global network of online communities for
technology companies and startups. Headquartered in Chicago,
USA, Built In operates Built In Chicago, Built In L.A., Built In
Austin and Built In Colorado.
Microsoft Ventures: see “Global Partners” above
Estonia
Techstars is a global ecosystem that empowers entrepreneurs
to bring new technologies to market wherever they choose to
build their business. With 18 mentorship-driven accelerator
programs worldwide, Techstars exists to support the world’s
most promising entrepreneurs throughout their journey.
Canada, Waterloo Region
Eesti Arengufond/Estonian Development Fund is designed to
support the positive changes in Estonian economy, investment
activity, and growth programs.
TLabs is India’s leading tech startup accelerator and early stage
seed-fund focused on internet and mobile. Powered by a panel
of 100+ mentors, TLabs has invested in 43 startups in its last
three years of existence.
Barcelona, Spain
Barcelona Activa integrated in the Area of Economy, Enterprise
and Employment, is the executive tool of the Economic
Development policies of the Barcelona City Council.

Acknowledgment & Partners 153
Berlin, Germany
Gruenderszene is the online magazine with the hottest stories
about and for the digital economy in Germany.
TechBerlin believes that entrepreneurship is a force for good
and that a thriving startup community is essential to nurturing
entrepreneurship. We’re building a platform to support
the community, a place where it shares news, events and
resources.
Microsoft Ventures: see “Global Partners” above
Boston, USA
TechHub is a unique environment where technology startups
can start up faster. We nurture an international network of
like-minded and focused tech entrepreneurs, providing places
where they can work, meet, collaborate, network, learn and
have fun. By getting the right people together in a physical
space, good things happen.
IPV Capital is a venture capital firm dedicated to delivering
exceptional investment performance to early stage, highgrowth technology firms in China. IPV brings together people,
capital, and ideas to help realize the next great technology
leaders of tomorrow.
London, UK
Denver/Boulder, USA
StartUp Britain is a national campaign by entrepreneurs
for entrepreneurs, harnessing the expertise and passion of
Britain’s leading businesspeople to celebrate, inspire and
accelerate enterprise in the UK.
Techstars: see “Multiple Ecosystems” above
Dublin, Ireland
The Dublin Commissioner for Startups is an independent office
promoting Dublin as a global tech hub for startup and scaling
companies, supported by Enterprise Ireland and Dublin City
Council.
Jakarta, Indonesia
Techstars: see “Multiple Ecosystems” above
Kejora is a tech business incubator. They focus
their investments on early stage startups related to
telecommunication, media, and technology sectors.
Chicago, USA
Kuala Lumpur, Malaysia
1871 is Chicago’s entrepreneurial hub for digital startups. Come
to a place where you can share ideas, make mistakes, work
hard, build your business and, with a little luck, change the
world. Welcome to 1871.
MaGIC’s mission is to catalyze the entrepreneurial ecosystem
in Malaysia, bringing together the abundant resources from
partners and communities alike.
China
InnoSpace is a leading incubation platform with its own
angel fund in Shanghai, offering a total solution for global
entrepreneurs ranging from capital raising, market/business
development, HR solutions and technological guidance.
AIM lays the foundation of innovation that inspires and
produces a new generation of innovative entrepreneurs by
creating wealth through knowledge, technology and innovation;
with a mission to stimulate and develop the innovation
ecosystem in Malaysia towards achieving Vision 2020.
MDeC’s mission is to spearhead the nation’s digital economy
by enhancing Malaysia’s status as a global hub and preferred
location for ICT industries; and to catalyze a holistic ecosystem
that promotes the pervasive use of ICT and connected
communities.
Centre for entrepreneurs promotes the role of entrepreneurs
in creating economic growth and social well-being. The Centre
is an independent organisation chaired by Financial Times
columnist and serial entrepreneur Luke Johnson.
Los Angeles / Orange County, USA
Cross Campus is the leading collaborative workspace and
business event venue in L.A. With a superior design & user
experience, best-in-class event programming and execution,
and a diverse community of innovative members, it has become
known as “the nerve center of Silicon Beach.”
Mucker Capital is the leading pre-seed and seed stage venture
fund based in Los Angeles.
Techstars: see “Multiple Ecosystems” above
Montreal, Canada
The International Startup Festival puts a new spin on
entrepreneurship each year with content ranging from back-ofthe-napkin ideas to champagne-popping exits.
Moscow, Russia
#tceh brings together startups, experts, and investors. It is a
new form of infrastructure for business development, providing
structure and expert advice to IT coworking.
Internet Development Fund initiatives (IIDF) provides funding
and expert resources, as well as acceleration programs, for
online startups in the early stages of development.

Acknowledgment & Partners 154
Russian Venture Company (RVC) is a government fund of
funds and a development agency aimed at building a national
innovation system in Russia.
New York, USA
DreamIt is an accelerator programs providing synergistic
innovation models that assist companies—from startups to
multinational corporations—in de-risking their businesses
quickly and cost effectively.
Rubicon strives to deliver real value through our extensive
global network of institutional limited partners, angels, and
advisors. Got challenges? We’ve got seasoned entrepreneurs
and industry leaders ready to go to bat for you.
Paris, France
France Digitale is an initiative to help startups and investors join
forces to create the French digital champions.
NUMA combines co-working, startup acceleration, events,
and open innovation programs for companies, startups and
communities at large.
Santiago, Chile
the history of computing and its ongoing impact on society.
Start-Up Chile’s goal is to increase the number of customervalidated and scalable companies that will leave a lasting impact
on the Latin American ecosystem.
Singapore
Sao Paulo, Brazil
The Innovators Institute is a professional development
center, peer support network, and global expert resource
for Innovation. Our role is to inspire, nurture, and accelerate
innovators to drive the Innovation Economy and re-invent the
world for the better.
The Brazilian Startup Association (ABStartups) is a nonprofit
entity that has more than 3,000 startups registered and the
mission to promote the Brazilian entrepreneurship market
globally.
Start-Up Brazil is a national program for startup acceleration, a
federal government initiative created by the Ministry of Science,
Technology and Innovation (MCTI) with Softex, in partnership
with Brazilian accelerators.
The Startup Farm is the bridge between entrepreneurs and the
success they seek, supporting them through our accelerator
program and other initiatives.
Startups, Technology and Asia. Infocomm Investments brings
them together.
Tel Aviv, Israel
Start-Up Nation Central is inspired by the story of how Israel
made the leap from being an isolated nation to an international
innovation powerhouse SNC will plug you in the heart of Israel’s
innovation ecosystem.
Toronto, Canada
Microsoft Ventures: see “Global Partners”.
TheFamily nurtures entrepreneurs through education, unfair
advantages and capital.
Startup Canada are entrepreneurs working together to build
an environment and culture for entrepreneurial growth and
success.
TechAlliance leverages and implements industry leading
enterprise solutions to help you rise above your competition.
Vancouver, Canada
50 Partners offers mentorship for innovative young startups,
resources and expertise through an established network of
successful entrepreneurs.
Silicon Valley, USA
Rome, Italy, INcube
INcube is at the “Convergence Point of Innovation” where
international Investor relationships and our Intesa Sanpaolo
Start-Up Initiative meets the innovation needs of mature
corporations, as well as the commercialization needs of
startups.
Seattle, USA
GSVlabs is a global innovation accelerator that supports the
growth of talent, startups, and corporate partners.
Startup Grind is a global startup community designed to
educate, inspire, and connect entrepreneurs. We host monthly
events in more than 150 cities and 65 countries featuring
successful local founders, innovators, educators, and investors.
Computer History Museum is a nonprofit organization with a
four-decade history as the world’s leading institution exploring
Startup Weekend Vancouver is part of the Up Global
community and brings entrepreneurs, local leaders, and friends
together over five days to build momentum and opportunity
around your community’s unique entrepreneurial identity.

Acknowledgment & Partners 155
Startup Package Partners
To reward participants of our online survey, multiple great
companies agreed to offer huge discounts on their product:
New Relic is a monitoring software for your web or mobile
application. Once you have your first product up and running, it
saves you a lot of pain and frustration.
Zendesk is a customer support application. Being responsive
and in touch with your customers makes a big difference no
matter in what stage your company is.
Olark is a lightweight chat tool that you can integrate on your site
or application within a few minutes. It’s great for engaging and
learning from your customers right when they use your product.
Close.io is a intuitive CRM with integrated calling, emailing, and
search capabilities. You can get setup and start calling within
minutes. Close.io also offered their guides on Outbound Startup
Sales and Inbound Startup Sales.
Pipedrive is a low-cost multi platform CRM for small teams. It has
great reporting and sales forecasting.
Iron.io is a hosted message queue service that is at the core of
many modern web applications.
Wix is a website builder for quickly testing new value propositions
with professionally looking websites and landing pages.
Foundersuite is a comprehensive compilation of tools and legal
documents to help early startups get off the ground.
Survey Promotion
Collaborators
Our project received great support from more than 60 local
partners distributed across more than 40 ecosystems. We
could not have done it without them. They are leaders of
accelerators, incubators, startup hubs, and VC firms who made
great efforts to spread the word about the project in their
community. Thank you to:
• Brazil
• AceleraTech
• Acelera Partners
• Aceleradora
• Beita
• Wayra
• Canada
• betakit
• Launch Academy
• Chile
• Corfo
• LatAm Startups
• China
• GWC
• Hax Accelerator
• InnoSpace
• Legend Holdings
• Tencent Incubator
• Denmark
• Trends online
• Germany
•
•
•
•
•
•
•
•
•
•
•
• RKW Kompetenzzentrum
India
• 10 000 Startups
• ispirt
Indonesia
• Daily Social
• Indonesian E-Commerce Association
Israel
• Jerusalem City Administration
• Tel Aviv Global City Administration
Netherlands
• Dutchstartupmap.nl
• Startupjuncture
Poland
• bitspiration
Russia
• Russian Startup Ranking
• Skolkovo
Singapore
• 500 Startups
• TechInAsia
• sph plug and play
Spain
• WWWhat’s new
Turkey
• Tohumte
United Kingdom
• Tech City
• Enterprise Nation
• Startup Britain
USA, Los Angeles
• LA TechDigest
• BixelExchange